PM Tools & Techniques

Title: Project Management Tools & Techniques

Current Edition:
Project Management Tools & Techniques, v.2. September 2015.
© European Union, 2015

No parts of this work may be transmitted outside of the European Commission without prior
written permission.
 PM Tools & Techniques
Ref. Ares(2020)5350662 - 08/10/2020

Title: Project Management Tools & Techniques

Current Edition:
Project Management Tools & Techniques, v.2.5 September 2015.
© European Union, 2015

http://intracomm.ec.testa.eu/PM2
https://webgate.ec.europa.eu/fpfis/wikis/display/pm2techniques/Welcome

This version is in line with the PM² Project Management Methodology Guide v.2.5
ISBN: 978-92-79-50854-7

No parts of this work may be transmitted outside of the European Commission without prior written
permission.

Produced and published by:

DIGIT.B1 Advisory Services
)

DIGIT.B1 Architecture office, Consultancy, Innovation and Relationship Management

Email: [email protected]
PM Tools & Techniques

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 PM Tools & Techniques

Table of Contents
1. The GROW Model ..................................................................................................................... 3
2. CIPP Model ................................................................................................................................ 5
3. PESTEL Analysis ......................................................................................................................... 7
4. Organising a To-Do List ............................................................................................................. 9
5. FSNPA Model of Team Performance (Tuckman's Model) ....................................................... 11
6. Effective Communication ........................................................................................................ 13
7. Project Stakeholder Matrix (PSM)........................................................................................... 15
8. Stakeholder Importance-Influence Matrix (SIIM) ................................................................... 17
9. Running Effective Meetings .................................................................................................... 19
10.Work Breakdown Structure .................................................................................................... 21
11.Product Breakdown Structure (PBS) ....................................................................................... 23
12.Efforts and Costs estimates..................................................................................................... 25
13.Three-Point Estimates using PERT .......................................................................................... 27
14.Project Scheduling................................................................................................................... 29
15.Critical Path Method ............................................................................................................... 31
16.Gantt Charts ............................................................................................................................ 33
17.Resource Levelling................................................................................................................... 35
18.Critical Chain Method ............................................................................................................. 37
19.Earned Value Management .................................................................................................... 39
20.Ishikawa/Fishbone Diagram .................................................................................................... 43
21.Delphi Technique .................................................................................................................... 45
22.Plan-Do-Check-Act Method .................................................................................................... 47
23.Make or Buy Analysis .............................................................................................................. 49
24.10 Cs of Supplier Evaluation .................................................................................................... 51
25.Proposal Evaluation Techniques ............................................................................................. 53
26.Pareto Chart ............................................................................................................................ 55
27.Project Assessment and Effectiveness Measurement ............................................................ 57
28.SECI Model - The Knowledge Spiral ........................................................................................ 59
29.Lessons Learned ...................................................................................................................... 61
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 PM Tools & Techniques

Introduction
The purpose of the PM2 Project Management Methodology is to enable European Commission Project
Managers (PMs) to deliver solutions and benefits to the European Commission through the effective
management of project work.
This document presents a set of Tools & Techniques addressing different areas related to project
management and project portfolio management.
Each Tool & Technique is summarised in 2 or 3 pages. It provides a high-level overview and summary
guidelines on how to use it as well as relevant references and sources for further reading.
The set of tools presented is by no means the complete set of tool used in project management - new
tools will be added as their description becomes available.
We hope that you find the first version of this publication useful and complementary to all our other
publications, that you have fun exploring further the Tools & Techniques and that you increase your
productivity by using them!
The CoEPM2 Team.

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1. The GROW Model

Description and Purpose

Knowledge area: Benefit Realization and Measurement

The GROW Model was introduced by John Whitmore to facilitate the setting of goals and the
designing of plans on how to achieve them. GROW is an acronym for Goal, Reality, Obstacles/Options
and Will/Way Forward. When applied within the context of a project, the GROW model enables the
project teams to set goals and review the action plans in order to achieve them. These goals can be
related to both the outcomes of the project (project goals) as well as to the individual performance of
team members (individual goals).
The four key elements of the GROW Model are described below:
 Goal: An objective that the project team aims to achieve.
 Reality: An assessment of the current situation, issues and challenges faced.
 Obstacles/Options: Roadblocks in achieving the goals and options on how to overcome them.
 Will/Way Forward: Action plans to overcome the obstacles to move ahead in a project.

The goals set by the project team should be specific and monitored from time to time. The goal setting
can be done through the use of frameworks like SMART, PURE and CLEAR. At any stage of the project
a review could be done of the current environment to understand the problems or issues faced by the
project team. The project team lists the current and expected future obstacles to achieving the stated
goal, and brainstorms on the different options that can be taken to overcome them. Action plans are
designed and executed based on the options identified. The goals are reviewed again at a later stage
in the project and the cycle is repeated.

Goal

Will / Way
Reality
Forward

Obstacles
/ Options

Figure 1.1: John Whitmore Model

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Using the Tool/Technique

Below are the steps to set goals and review the actions using the GROW Model.

Step 1: Set the goals

 Project goals should be set by the Project Managers (PMs) in consultation with the project
team. Effective goal setting can be done through the use of frameworks such as SMART, PURE
or CLEAR.

SMART Goals:
 Specific: The goals should be clear and unambiguous.
 Measurable: There should be a well-defined criterion for measuring progress of goals.
 Attainable: The objective should be realistic and not extreme so that it can be achieved.
 Relevant: The goals should be aligned to the effort and time being invested.
 Time Bound: Target date should be set for all the goals so that there is a constant focus.

PURE Goals:
 Positively Stated: The goals should be stated in a positive rather than a negative way.
 Understood: The goals need to be interpreted by everyone in the same manner.
 Relevant: The goals should focus on the wider vision and be aligned to other goals.
 Ethical: Goals should be aligned to the best practices of the larger organisation.

CLEAR Goals:
 Challenging: The goals should stretch and push the team so that there is constant focus.
 Legal: Goals should abide the law of the land and be in line with the larger organisation.
 Environmentally sound: Goals should keep the environmental aspects in consideration.
 Appropriate: Goals should be appropriate and relevant to the larger organisation.
 Recorded: Goals should be written down and visible so that the focus is not lost.

Step 2: Understand the reality

 The current situation should be assessed carefully as to identify the faced issues and
challenges. A good understanding of the circumstances is important to effectively use and
execute the GROW model.

Step 3: Identify the obstacles and options

 Identify risks and issues that may arise during the life of the project or activity, as well as
propose the actions necessary to manage these.
These risks and issues are the obstacles, and the proposed actions are options in order to achieve the
goals.

Step 4: Plan the way forward

 An action plan as to overcome the identified obstacles and options needs to be outline in
order to move forward and to attain the overall project goals or objectives.

References & Sources for Further Reading

 http://www.mindtools.com/pages/article/newLDR 89.htm
 http://www.theagileleader.com/2012/02/goal-setting-are-your-goals-smart-pure-and-clear/
 John Whitmore. Coaching for Performance: Growing People, Performance and Purpose. WS Bookwell
© 2006.
 Goal Setting: How to Create an Action Plan and Achieve Your Goals (Second Edition). Michael S.
Dobson, Susan B. Wilson. American Association Management © 2008.

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PM Tools & Techniques

allocating resources, scheduling work and assigning human resources. Project Managers (PMs)
set up and confirm the plans and budgets before taking any action.

Step 3: Evaluate the Process

 Data is collected to analyse the actions and implementation plans are designed to achieve the
project objectives. Common methods of data collection are baseline observations, test results
that can be compared against a time frame sequence, and comparing stated objectives with
observed effects. It helps the Project Managers (PMs) to measure the process efficiency.

Step 4: Evaluate the Product

 This step evaluates the outcomes of the project, both for short and long term. Data is
collected from testing the complete design and comparing it with other designs and projects.
It measures the overall success of the project in achieving the desired goals and objectives.

Measuring the outcomes of the project and comparing them with the project objectives provides
Project Managers (PMs) inputs whether to continue, modify or drop an existing project. However the
CIPP model is complete and robust, there are a few limitations in the process involved. The process of
getting the requirement details from several stakeholders can be slow, costly and complex. It can also
be difficult to measure the process efficiency due to the complexity of the processes or due to internal
political issues.
Overall the CIPP Model is a systematic and standardised process for any project evaluation.

References & Sources for Further Reading

 http://work.chron.com/use-cipp-model-program-evaluation-10592.html
 http://www.cglrc.cgiar.org/icraf/toolkit/The CIPP evaluation model.htm
 http://www.swinburne.edu.au/spl/learningspacesproject/outcomes/files/SUT Theoretical Framework
.pdf
 Performance Evaluation: Proven Approaches for Improving Program and Organizational
Performance. Ingrid Guerra-López. Jossey-Bass © 2008.
 Evaluation Theory, Models, and Applications. Daniel L. Stufflebeam and Anthony J. Shinkfield. John
Wiley & Sons © 2007.

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 PM Tools & Techniques

3. PESTEL Analysis

Description and Purpose

Knowledge area: Requirements Gathering and Management

The PESTEL Analysis is a used tool to understand how an objective/goal is impacted by the
environment one is operating in. It provides information about five factors: Political, Economic, Social,
Technological, Environmental, and Legal that could have an impact on the project. This analysis helps
to brainstorm about the influence of each factor, as well as drawing a conclusion from it. This tool can
be used in any type of project where external factors could have an impact on the objective or
execution of the project.
The PESTEL analysis helps the project team to take into account changes in environment positively, so
that there is a higher probability of success. Understanding the environment factors, which are
beyond one’s control, helps to make a plan to tackle difficult potential scenarios. This analysis should
be free of assumptions and based on realities of the current environment.
The project team first identifies which of the factors are relevant for the current project objective. The
team then starts to brainstorm on the identified factors and assembles information on each factor.
Afterwards, this information is used in order to establish conclusions on the impact of each of the five
factors. In addition, these conclusions will feed the process of designing a plan on how to tackle
potential risk scenarios.

Political

Legal Economic

Project
Objective

Environmental Social

Technological

Figure 3.1: PESTEL Framework

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PM Tools & Techniques

Using the Tool/Technique

The PESTEL Analysis considers the five factors below that could impact the project objective or
execution and helps the project team in understanding the current environment:

Political
 These are factors which could have an impact on the project through a related tax or labour
policy, market regulations or other political governance issues.

Economic
 These are factors which could have an impact on the execution of the project. These include
factors related to economic growth, interest rates, budget cycles and other economical
governance issues.

Social
 These are socio-cultural factors that could have an impact on the project objective. These
factors could consist of the population growth rate, age distribution, social attitudes and
preferences, lifestyle choices, cultural changes, etc.

Technological
 These factors relate to the technological aspects, for example: research and development
activity, automation changes, emerging technology, outsourcing decisions, etc.

Environmental
 These factors include ecological and environmental aspects, which might have an impact on
some industries like tourism, farming, insurance, which may be related to the project. The
factors include changes in weather, climate, landscape, etc.

Legal
 These factors relate to which legal bindings operate the execution of the project. This could
include discrimination law, consumer law, antitrust law, employment law, health and safety
law or other legal governance issues.

The PESTEL model covers almost all the factors that could have an impact on the project objective. In
some cases of use, the PESTEL model has been extended to STEEPLED model, adding Ethics and
Demographics factors as well. However, the project team only needs to consider the factors which are
relevant to the current project objective or execution and to list down the factors impacting it. This
results in planning the right actions for countering any factors adversely impacting the project.

References & Sources for Further Reading

 http://pestel-analysis.com/
 http://www.mindtools.com/pages/article/newTMC 09.htm
 Analysis Without Paralysis: 10 Tools to Make Better Strategic Decisions. Babette E. Bensoussan, Craig
S. Fleisher. FT Press. © 2008.
 Brilliant Business Plan. Dr Kevan Williams, Prentice Hall © 2010.

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4. Organising a To-Do List

Description and Purpose

Knowledge area: Time Management

Projects are not run in a vacuum; they are run in an organisational context. As a result, during the life
of the project, the Project Manager (PM) and team will get lost in the day-to-day activities and get
sucked into spending time on activities that do not directly contribute to the project goals. It is
important to manage available time well during projects by understanding the priority of activities. It
helps to organise a To-Do list by focussing on which activities need urgent attention and are important
for achieving project goals.
Important

Schedule for later Do now

Not Important

Do not do Delegate

Not Urgent Urgent

Figure 4.1: Eisenhower Matrix

A To-Do list can be organised using an Eisenhower Matrix as shown in Figure 4.1 above. The matrix
categorises tasks into different quadrants based on importance and urgency. It is important to
understand these two types of categories in order to organise activities during projects:
 Important: These activities have a direct effect on the outcome and achievement of the
project goals.
 Urgent: These are activities that demand immediate attention before their consequences
affect project goals.

Based on the urgency and importance of activities, the Eisenhower Matrix categorises activities in the
following four quadrants:
 Do Now: Urgent, Important activities that are Critical Activities of the project.
 Schedule for later: Not Urgent, Important activities that are Important Goals of the project.
 Delegate: Urgent, Not Important activities that are Interruptions of the project.
 Do not do: Not Urgent, Not Important activities that are Distractions of the project.

Once the activities or tasks of a project are categorised, the Project Manager (PM) can easily organise
a To-Do list and optimise his or her time.

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PM Tools & Techniques

Using the Tool/Technique

The Eisenhower Matrix is a simple tool to organise a To-Do list to effectively manage time during the
execution of a project. Below are the steps to create and use the Eisenhower Matrix.

Steps
 List all the day-to-day activities that need to be completed for the project.
 Rate the importance of each activity on a scale of 1 (Low) to 5 (High).
 Rate the urgency of each activity on a scale of 1 (Low) to 5 (High).
 Plot the activities on the Eisenhower Matrix (Urgency Rating, Importance Rating).
 Organise a To-Do list according to the categorisation of activities in the four quadrants.

Different strategies should be employed for the activities categorised in the four quadrants.

Do Now - Critical Activities – Urgent, Important

 These are activities which are unexpected and unplanned but are both important and urgent.
 The Project Manager (PM) or person organising this To-Do list should take care of these
activities immediately – all other activities should be put on hold.

Schedule for later - Important Goals – Not Urgent, Important

 These are important activities that help to achieve the project goals.
 Time should be allocated to complete these activities before they become urgent issues, and it
is important to not allow a backlog of these activities to build.

Delegate - Interruptions – Urgent, Not Important

 These are activities that must be done urgently, but that do not directly contribute towards
the achievement of project goals.
 These activities should be delegated so that they are urgently taken care-of.
 How important a task can be before it is not delegated is up to the person doing the to-do list,
however keep in mind that managing the importance of delegated tasks is a key aspect of
project team management and can directly affect team morale.

Do not do - Distractions – Not Urgent, Not Important

 These are activities that are not urgent and have no relation to the project objectives or goals.
 These activities should be avoided as much as possible.
 The Project manager should either cancel or ignore them. If such activities are handled
accordingly, others may not request for action on such activities in future.

It is easy to get lost in the day-to-day and a linear list of to-do’s that grows on a daily basis. It is
important to prioritise activities and understand what contributes to the project and what does not.
Using a standard prioritising method like the Eisenhower Matrix helps to keep the focus on important
activities that lead to the achievement of project goals and objectives.

References & Sources for Further Reading

 https://timegt.com/2010/07/14/what-is-the-eisenhower-matrix/
 http://www.mindtools.com/pages/article/newHTE 91.htm
 http://pm4you.wordpress.com/2012/04/26/eisenhower-matrix-for-project-manager/
 Personal Productivity Secrets. Maura Nevel Thomas. John Wiley & Sons © 2012.
 The Decision Book: Fifty Models for Strategic Thinking. Mikael Krogerus, Roman Tschappeler.
Legoprint Spa Lavis © 2008.

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Project Manager:
 Project Managers (PMs) need to be directive in this phase as team members work individually.

Stage 2: Storming
Team members:
 In this phase ideas and solutions from team members may compete against each other.
 The team addresses project issues (leadership model, communication channel etc.).
 Differences, issues and conflicts stimulate the development of project team members.

Project Manager:
 Project Managers (PMs) should provide guidance on professional behaviour during this time.

Stage 3: Norming
Team members:
 Team members start respecting other views or opinions and come to an agreement.
 Trust begins to develop through the valuable contribution of team members.
 Individual team members play a greater role in handling project responsibilities.
 Team members start supporting each other in the establishment of project deliverables.

Stage 4: Performing
Team members:
 The team is highly motivated and knowledgeable resulting in a peak performance.
 Members are now competent, autonomous and able to make decisions on their own.
 High degree of comfort in the group is stimulating the completion of project tasks.

Project Manager:
 Project Managers (PMs) contribute as team members rather than as supervisors.

Stage 5: Adjourning
Team members:
 This stage is about completion and disengagement from project activities and members.
 Individuals recognise their effort as part of the group and move on to other projects.
 Also described as the Deforming and Mourning stage as team members get separated.
 This phase can be difficult for team members who developed close work-relations.

In order to improve the project team performance, the main focus of the project Manager should be
to understand the stage of group development the project team is currently in. The model also states
that due to changes in the project environment, the group may tend to return to the previous stage of
the Tuckman Model. These changes in the project environment could be a new project Manager, a
change in project team members or changes in the project goals or objectives. Whenever this occurs it
is important to go through the different stages of the Tuckman model again.

References & Sources for Further Reading

 http://www.mindtools.com/pages/article/newLDR 86.htm
 http://www.teambuilding.co.uk/Forming-Storming-Norming-Performing.html
 http://www.chimaeraconsulting.com/tuckman.htm
 Collective Excellence: Building Effective Teams, Mel Hensey. Second Edition. ASCE Press © 2001.
 Group Dynamics (Fifth Edition), Donelson R. Forsyth. Pre-Press CMG © 2010.

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6. Effective Communication

Description and Purpose

Knowledge area: Stakeholders management and communication

Communication is the process of exchanging information and ideas. It is an active process as it

involves encoding, transmitting and decoding of messages.
The sender of the information will, first of all, transform the message in a way the receiver can
understand it. Secondly he needs to find a mean to transmit it to the receiver. And the third step is
the receiver who has to decode the message to understand it.
This is a process that everybody does on a daily basis and we hardly think about it when performing it.
Communication becomes effective once the message is understood by the receiver as intended by the
sender. This entails that the sender (in verbal communication) has to consider the following skills:

Figure 6.1: Effective communication

Some of the skills are briefly discussed hereafter:

 Eye contact & visible mouth: look at your audience/person and don't hide your mouth.
 Body language: your body speaks to your audience so align the body language to your
speaking language (don't say that the figures are excellent while looking sad).
 Silence: when asking questions or feedback give the audience the time to react/reflect.

Also bear in mind that the more persons or groups are at the receiver's side the harder it becomes to
have your message transferred in a clear and concise manner. So try to limit the audience for your
message and send maybe several messages to smaller groups.
Effective communication helps in problem solving and conflict management.

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PM Tools & Techniques

Using the Tool/Technique

Effective communication is not a tool that you can download and run every time you have a message
to transmit. It is more a technique where guidelines can be given and it is up to the sender to decide
what the best way is to communicate the message to the receiver(s).
As stated in the previous paragraph effective communication happens in 3 steps. Each step is
elaborated hereafter.

Step 1: Encoding the message

 Encode the message according to the following principles:
Messages must be direct: state what you want instead of sending hints.
 Own your messages: say what you think/want and do not say the team, some people, etc.
 Messages must be complete and specific: do not leave out important information.
 Messages must be clear and consistent: avoid ambiguity and leaps of logic.
 Separate facts from your opinion.
 Focus on one thing at the time.
 Find the proper granularity for your audience (remind that less is better).
 Adapt the style of communication to the listeners (formal, scientific, aesthetics).

Step 2: Transmitting the message

 The message is now in the right format. The next step is to transmit it to your audience.
 When transmitting a message keep in mind the following equation:
 40% of the message is what you hear: tone of voice, vocal clarity, verbal expressiveness.
 50% of the message is what you see or feel: facial expression, dress and grooming, posture,
eye contact, gesture.
 Only 10% of the message is about the words you're saying.
 As a consequence be concise of the impact of all the other aspects besides the wording.
 Decide on the medium to use for the communication. Some media allow to have direct
reaction/contact whilst others not (e.g. live presentation versus an email).
 When the receivers cannot react instantly to your communication then state clearly how one
can react and specify a timeframe for the reactions.
 Decide on the right timing for your message. Be aware that no other communication of a
higher importance is sent at the same time so that your message is neglected.

Step 3: Decoding the message

 The receiver got the message and now has to take out all the "noise" of the message. Noise
refers to external influences that prevent the correct interpretation of the communication.
 Noise is categorised in the following groups:
 Psychological noise: this comes from our assumptions, stereotypes, reputations and you can
become blinded for the original message. It is difficult to free yourself from this.
 Physical noise: any external or environmental sound that distracts you.
 Semantic noise: caused by the sender because of specific grammar or technical language that
the receiver does not understand.
 The receiver will now read and hopefully understand the message.

References & Sources for Further Reading

 http://www.mindtools.com/pages/article/Body Language.htm
 http://www.helpguide.org/articles/relationships/effective-communication.htm#what
 Sport Psychology for Coaches, American Sport Education Program, © 2008 (ISBN 978-0-7360-3986-4).
 In the Company of Others: An Introduction to Communication, Rothwell Dan J. McGraw Hill © 2004.

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7. Project Stakeholder Matrix (PSM)

Description and Purpose

Knowledge area: Stakeholder Management

A project stakeholder matrix (PSM) is a specific artefact in the PM² methodology. This chapter starts
with the PSM as defined in the guide and adds another dimension to it.
This dimension is more a personal view of the project manager on the stakeholders. This overview can
also be useful in case the project manager is changed during the project as a handover document.
Keep in mind that this part of the Project Stakeholders Matrix is confidential and should not appear in
a public part of the project repository.

Figure 7.1: Example of Project Stakeholder Matrix

Using the Tool/Technique

Step 1: Start with the existing project stakeholder matrix (PSM)

 The existing PSM is taken as the basis.

Step 2: Take the second sheet of the template

 Go to the second sheet of the template.
 Define how many top stakeholders you have (suggestion to take between 3 and 5).
 Make a copy of this sheet for each of the defined stakeholders.

Step 3: Fill in the fields (for each identified stakeholder) following the guidelines given hereafter
The fields are grouped into several logical units. Every unit /field is explained hereafter.
 Personal information: contains additional fields (e.g. email, mobile, etc.).
 Active: to indicate for each phase the expected involvement of the stakeholder. The value is
translated in a colour line to give a clear picture of the involvement over time.
 Communication profile: used to detail the ways of communication and the frequency of it for
this stakeholder. Information is taken from the communication plan and specific information
can be added (e.g. a face-to-face (FTF) in case of a crisis).

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PM Tools & Techniques

 Influence: this topic has 3 sub-topics. The first one being the power the stakeholder has on the
project to Make/force decisions. The second one is about the interest he/she has in the
project (e.g. the outcome can help in having a promotion). The last one is the influence to
guide/direct the project.
 Risk appetite: for the 3 main areas (budget, timing, and scope) the risk appetite of the
stakeholder can be given. This can be useful when a change/issue is encountered to predict
the possible reaction of the stakeholder.
 Concerns and needs: here you can add specific concerns needs that the stakeholder expressed
to you (e.g. GO LIVE date cannot change due to legal constraints).
 Details: any interesting fact you learn about your stakeholder can be put under this topic. It
can go from the names of the children up to hobbies.

Step 4: Protect the document

 As this document contains personal and subjective information put a password on it.
 Store this document in a private folder and not on the project server.

References & Sources for Further Reading

 Stakeholder analysis in projects: Challenges in using current guidelines in the real world, Jepsen Anna
Lund , Eskerod Pernille.©2008

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8. Stakeholder Importance-Influence Matrix (SIIM)

Description and Purpose

Knowledge area: stakeholder management, communication, requirements management

This technique is used to facilitate and document the analysis of the influence and the importance of
each stakeholder in the project. As Project Manager (PM) it is out most important to know your
stakeholders and what they can mean/do for your project. This can be in a positive and in a negative
way.
The importance of a stakeholder indicates the extent to which his needs and interests will be
prioritised by planned activities. This means that a stakeholder is considered important when his
needs and interests will get a higher priority when creating/revising the planning. As a consequence he
will be faster contacted when a revision of the planning is possibly needed to get his/her feedback.
The influence of a stakeholder for the project is the power he has over the planning and
implementation of activities. A stakeholder that can demand a change in the planning has a big
influence on the project. Most of the time the person(s) that can allocate money and/or resources to
the project is (are) considered to have a high influence.

Using the Tool/Technique

Step 1: List the stakeholders for the project

 Take from the Project Stakeholders Matrix (PSM) all stakeholders and put them on a list.
 If a stakeholder is not a physical person but a group then take the person who represents the
group.

Step 2: For each stakeholder access the importance of the project

 For everybody on the list rate the importance of him/her to the project between 1 and 5
where 5 is very important to the project and 1 is hardly important to the project.
 Put the number next to the name of the stakeholder.

Step 3: For each stakeholder access the influence he has on the project
 Do the same as in step 2 but now for the influence the person has over the schedule of the
project. Again 5 means that she/he has large influence over the schedule and 1 means nearly
no influence over the schedule.

Step 4: Plot the position in the matrix as shown hereafter

 With the two numbers obtained from the previous steps plot the results in the matrix as
shown hereafter.
 Check for each stakeholder in which group he is and read the suggestions put hereafter.
 If you created a Project Stakeholders Matrix (PSM) then add the numbers obtained also in the
PSM.

Step 5: Read the specification for every stakeholder

 For every stakeholder read the possible points of attention as described hereafter.
 Deduce actions from these points of attention.
 Put these actions in your personal agenda.

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PM Tools & Techniques

Figure 8.1: Stakeholder Importance/Influence Matrix

The four major parts in the table and the way to handle them are briefly described hereafter.
Part A: PROTECT: consists of stakeholders that have a great importance in the project but,
unfortunately, have low influence. Special attention is needed to protect their interests as they don't
possess the required influence to protect their own needs.
Part B: GOOD RELATION: these stakeholders have a huge interest and also a big influence in the
project. You need to set-up a close working relationship with them. Also agree the ways of
communicating with them besides the standard communication agreements. This can be a face-to-
face update on a daily/weekly basis.
Part C: LOW PRIORITY: this group has a low priority for the project and practically no influence so your
involvement in them should be a minimum. However be aware that they keep a positive attitude to
your project so don't neglect them.
Part D: MONITOR: this group may be a source of risk as their influence is high but the importance of
the project is low for them. So they need to be carefully monitored and managed to make sure that
they don't lose their interest in the project or, even worse, become a blocking factor.

References & Sources for Further Reading

 http://www.icra-edu.org/objects/anglolearn/Stakeholder Matrices-Guidelines(new).pdf
 http://www.apmasnetwork.org/node/80

18
PM Tools & Techniques

Figure 9.1 provides a set of general steps that should be taken to ensure that meetings are run
efficiently and effectively. This model focuses on thoroughly preparing the meeting to ensure
attainment of the objectives, and to improve communication and follow-up past meeting. The overall
concept is to be more focused and concise, and to ensure that meetings result in a set of key actions.

Using the Tool/Technique

Running effective and efficient meetings helps the project to progress at a faster pace with limited
usage of resources and time. Below are the steps to conduct an effective meeting:
Step 1: Prepare for Meeting
 Define the objectives of the meeting.
 Define the type of meeting and any important tools to aid in running the meeting.
 Prepare an agenda stating the meeting objectives and expectations.
 Define a list of invitees, keeping in mind that it is better to only invite the necessary
stakeholders, and that smaller meetings are more effective.
 Send the agenda along with the invite.
Step 2: Conduct Meeting
 State the meeting objectives and set the ground rules for the meeting at its beginning (for
example no food, no usage of electronic devices).
 Strictly follow the set agenda and try to minimise discussions out of scope.
 For a meeting with several objectives, it is important to prioritise discussions.
 Define speaking time as a means of time-boxing discussion and avoiding deviation from the
main topics.
Step 3: Communicate Actions
 Have someone in the meeting take minutes, as well as log decision, issues, risk, and actions
discussed during the meeting.
 Send the minutes of the meeting as soon as possible after the completion of the meeting.
Step 4: Review Actions
 Action items of the meeting notes should be reviewed as per the target dates.
 Reminders should be sent to the concerned members, who need to take actions.
 Review of work done and work pending should be conducted in follow up meetings.

For larger or longer meetings, and particularly for brainstorming meetings, it is helpful to have
supporting staff performing all the record keeping and assisting in the facilitation of the meeting.
These roles include:
 Timekeeper: Reminds the facilitator about the time allotted for key agenda items.
 Notes Taker: Records and summarises the meeting minutes and distributes meetings notes.
 Whiteboard Notes Taker: Writes ideas on the whiteboard during brainstorming sessions and
records the final points from the board to send to all invitees.
The organiser should take charge of the meeting and ensure that the discussion runs smoothly. Do not
hesitate to table, or put aside, topics that do not contribute to the meeting objectives, or are not part
of the agenda. The focus of the meeting should be to collect constructive inputs from everyone
present, and at the end of the meeting everyone should be aware of the key decisions and actions
that must be taken care-of.

References & Sources for Further Reading

 http://www.openforum.com/articles/how-to-run-an-effective-meeting-a-small-business-guide/
 http://www.mindtools.com/CommSkll/RunningMeetings.htm
 http://www.inc.com/guides/2010/08/how-to-run-effective-meeting.html
 Successful Meetings: How to Plan, Prepare, and Execute Top-Notch Business Meetings, Shri Henkel.
Atlantic Publishing Group © 2007.
 The Manager's Guide to Effective Meetings, Barbara J. Streibel. CWL Publishing © 2003.
20
 PM Tools & Techniques

10. Work Breakdown Structure

Description and Purpose

Knowledge area: Scope management, Planning

A Work Breakdown Structure (WBS) consists of logically decomposing a project into smaller work
components. It is the first step to organise work, taking into account extensive details, in a structured
format. A Project Manager (PM) may use a WBS to decompose a project in stages, deliverables, activities,
tasks, business units, etc. However a WBS is a good way to define a decomposition of the project work, it
does not provide information on time, sequence or dependency of the work. The role of the project team
members is to support the Project Manager (PM) in identifying the lower level activities and tasks of the
project.

Different WBS techniques can be used to decompose a large project into smaller and identifiable activities.
Below are some of the commonly used techniques used by Project Managers (PMs) to create a
comprehensive and specific WBS.

 Project Stages: Work is broken down into different stages

 Project Outputs: Work is divided based on several project outputs or deliverables
 Work Packages Breakdown: Work is divided into a list of work packages and tasks
 Organisation Breakdown: Work is divided based on departments or business units

WBS is a formal project deliverable and any changes to it should go through a change control process. It is
important for the Project Manager (PM) to review the WBS with the project team and the other
stakeholders before executing the project.

Project
1.0

Deliverable Deliverable Deliverable

1.1 1.2 1.3

Activity Activity Activity Activity Activity

1.1.1 1.1.2 1.3.1 1.3.2 1.3.3

Task Task
1.1.1.1 1.3.1.1

Task Task
1.1.1.2 1.3.1.2

Task
1.1.1.3

Figure 10.1: Work Breakdown Structure

Figure 10.1 above is an example of a WBS which breaks down the work into work packages and respective
activities and tasks.

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PM Tools & Techniques

Using the Tool/Technique

Creating a WBS helps the Project Manager (PM) to logically decompose the project work in order to be
both complete and specific while managing a project activities or tasks. Below are the steps to create and
use a Work Breakdown Structure in a project.

Step 1: Identify project goal

 Identify the project goals and objectives and the scope of the work involved

Step 2: Determine the breakdown model

 Depending on the scope of the work, determine the break down technique
 Work can be categorised in project stages, outputs, packages, departments, etc.
 Break down the project work into a first level based on the selected WBS technique

Step 3: Divide the work components

 Break down the first level of the WBS into smaller and identifiable work components
 Depending upon the required detail, break down the WBS into a second, third or lower level of
work
 A general rule for the decomposition of project work is that each identified element of the lowest
level of the WBS, referred to as tasks in the example of Figure 10.1, and cannot involve more than
80 hours. If needed, an additional WBS level will be created.

Step 4: Review the WBS

 Review the complete WBS covering all components linked to the scope of the work
 Include other project activities like periodic reviews or trainings in the overall structure
 Verify that all activities are identifiable and well defined
 The Project Manager (PM) should ensure the completeness of the WBS.
Project Managers (PMs) can use the WBS as a basis to assign different responsibilities, tasks or deliverables
in the project.

References & Sources for Further Reading

 http://www.projectsmart.co.uk/work-breakdown-structure-purpose-process-pitfalls.html
 http://www.cmguide.org/archives/1401
 http://www.netmba.com/operations/project/wbs/
 Work Breakdown Structures: The Foundation for Project Management Excellence, Eric S. Norman, Shelly A.
Brotherton and Robert T. Fried. John Wiley & Sons © 2008.
 Building a Project Work Breakdown Structure: Visualizing Objectives, Deliverables, Activities and
Schedules, Dennis P. Miller. CRC Press © 2009.

22
 PM Tools & Techniques

11. Product Breakdown Structure (PBS)

Description and Purpose

Knowledge area: Planning and control

Product Based Planning is a technique that is, amongst other institutions, recommended by Prince2©. A
Product Breakdown Structure (PBS) is an essential part for this technique. Its purpose is to define the
products (deliverables) of a project and how they relate to each other. The PBS provides an exhaustive,
hierarchical tree structure of deliverables (physical, functional or conceptual) that make up the entire
project.

Prince2© describes a PBS as “a hierarchical structure that breaks down a final product into its constituent
sub-products. It helps the planner to think of what other products are needed to build the final product and
to clarify all necessary work for the creation of that final product".

Figure 11.1: Product Breakdown Structure

The Product Breakdown Structure has a similar structure as the Work Breakdown Structure but it is used at
a different step in the planning process. The PBS precedes the WBS and puts the focus on representing the
desired outputs (products) needed for the project. This feeds the creation of the WBS which identifies the
tasks and activities required to deliver these outputs.

Quote: the PBS defines where you want to go and the WBS tells you how to get there.

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PM Tools & Techniques

Using the Tool/Technique

The drawing after the steps presents a product breakdown structure for the simple creation of a
motorcycle.

Step 1: Define the high level product

 Define the global outcome of your project meaning what "product" your project will deliver. This
can be a software, a building, a document, a conference,…
 Put this on the top of the list
 In the example a motorcycle is taken which is the final product of the project

Step 2: Define the sub parts

 Define all the sub-parts your final product is made of
 Add them at the second level of the WBS
 Connect them with the top level
 The sub parts in the example are 1. the engine, 2. the frame and 3. the suspension

Step 3: Define the sub levels up to the leaves

 For every sub part you keep on dividing this into smaller parts until you have a product that is
atomic or can be considered as such, e.g. 3.1.1 tires
 When creating a software system this can be a specific module or a test cycle that generates a
report

Step 4: Review the PBS

 Once all parts are known the review of the visual representation of the PBS can be started
 Re-arrange the parts and sub-parts so that a balance is made in the presentation

After these steps the PBS can be used to derive the tasks/activities needed for the WBS or for a product
based planning.

Note: There are several tools available on the market to perform this kind of representation (e.g. Visio,
PowerPoint, mindmapper, etc.).

References & Sources for Further Reading

 Effective work breakdown structures (project management essential library), Gregory T. Haugan, ©2001

24
 PM Tools & Techniques

12. Efforts and Costs estimates

Description and Purpose

Knowledge area: Planning and control

This technique has as predecessor the work breakdown structure (see chapter 10). The outcome of the
Work Breakdown structure is used as the input for the Cost and Estimates technique.

All the work items are estimated for the required effort to perform this work and the associated cost. The
required effort is then matched to the availability and the capability of the resources.

The Project Manager (PM) coordinates the estimation of the effort and cost for each task. This is done in close
collaboration with the task owners or other experts for each impact area (who are usually members of the
Project Core Team (PCT)).
There are different approaches when estimating time and cost for the finest detail level of tasks of a Work
Breakdown:
 Based on expert advice.
 Based on historical information.
 Based on similarity to other tasks.
 Based on the Function Point Analysis (FPA) method (IT projects).
 Based on other tool or commonly acceptable methods.
 Based on resource cost information (pricelists, outsourcing contracts…)

Note: the accuracy of the WBS is of the highest importance to get adequate estimates. When creating the
WBS with the stakeholders bear in mind to mention to them that the better the WBS the better the
estimates.

Using the Tool/Technique

Based on the above chosen approach or a combination of them, the following steps are needed.

Step 1: Look at the lowest level of the Work Breakdown.

 The calculation starts at the bottom of the work breakdown. This ensures to have the most
accurate estimate

Step 2: Estimate the likely amount of effort

 Estimation aims at getting as closest to reality as you know in this point of time. Estimates are
never correct
 For each activity estimate the effort that will be required
 When performing this step bear also in mind the availability and the skills of the required resource
 It is possible that additional training is required. Add this effort also to the activity
Step 3: Include contingency
 Task owners might calculate contingency time (buffer) that can be added to the activity duration in
recognition of schedule risk. This is typically a percentage of the estimated effort
 Verify if the task owners have added contingency. If no then add a percentage to each activity
 Allocate time for reviews and rework as the first version of a deliverable is rarely the final one

Step 4: The task owners must validate the effort estimates.

 Once the calculation is done request a validation for each task by his task owner, like that a strong
commitment is made

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PM Tools & Techniques

Step 5: Estimate the likely cost to be incurred on the activity (if it must be traced).
 If the Project Owner(PO) does not want detailed traceability for the cost per activity then you can
go to Step 6
 For each activity add the cost of one workday (WD) times the number of needed workdays
 Create the total cost for all activities
Step 6: Add non people cost
 Finally add the related cost for any non-people related activity if necessary (hardware, software,
buying/renting of material, assets…)
 If some items are regularly used you can consider to create a WBS dictionary containing fixed prices
for specific items (e.g. one test cycle)
Step 7: Finalise the estimate
 The last step is to sum all different parts together and the total amount of effort and cost for your
project is available

Hereafter a table is presented that shows the relationship between the level of accuracy and the size of
projects.

Figure 12.1: Size of projects versus Accuracy

References & Sources for Further Reading

 http://www.projectsmart.co.uk/project-cost-management.php, Joseph Phillips ©2010
 Secrets to mastering the WBS in real-world projects, Liliana Buchtik, ©2010

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PM Tools & Techniques

Using the Tool/Technique

The three-point estimate technique is part of the PERT toolset and is commonly used, in conjunction
with Network Diagrams, by Project Managers (PMs) to better estimate cost or duration of projects.
The three-point estimate is basically a weighted average of several estimates of activity duration or
cost. The expected duration and standard deviation of a project’s cost or duration using the three-
point estimate is calculated by the formulas below:
E = (a + 4m + b)/6
SD = (b – a)/6
Where, E is the expected duration, a is the optimistic estimate of cost or duration, m is the most likely
estimate, b is the pessimistic estimate, and SD is the standard deviation. The three estimates forming
the three-point estimate are defined as follows:
Optimistic value (a):

 The minimum cost or effort that can be achieved in case that only good performance is
realised throughout the process. The probability of achieving this estimate should not be more
than 1% (i.e. there is 99% probability that the cost/effort or duration of this activity will be
larger than this estimate).

Most likely value (m):

 The most probable cost or effort that the person, that is best qualified to judge, would expect.
This estimate would also occur most often in case that the activity could be repeated
numerous times under the same conditions.

Pessimistic value (b):

 The maximum cost or effort needed in case that unusually bad performance is realised. The
probability of realising this estimate should not be more than 1% (i.e. there is 99% probability
that the cost/effort or duration of this activity will not exceed this estimate).

It is important to note that a basic assumption in the estimating process is that the three estimates are
based on the same level of effort, for example the same number of persons working or the same
number of shifts and days per week (i.e. 1 man day = 7,5 hours).

In addition, the three-point estimate is designed to capture and mitigate the uncertainty of providing a
single estimate, and is not designed to provide forecasts of buffers to mitigate changes to the
fundamental conditions of the project. For example, the technique can be used because the project
team is unsure of the difficulty of implementing some aspect of the project and is not used to capture
the effects of a change in the scope of the implementation.

Lastly, it is also important to note that the three-point estimate technique does not mean that expert
advice is no longer necessary to build project cost and duration estimates. While the technique
provides a weighted average of three estimates, a large standard deviation will mean that the
likelihood of achieving this expected cost or duration is very low. Involving experts to provide the
three-estimates will increase the accuracy of the three-point estimate and reduce the risk or
uncertainty of the project.

References & Sources for Further Reading

 http://project-management-knowledge.com/definitions/t/three-point-estimates/
 http://www.netmba.com/operations/project/pert/
 http://gates.comm.virginia.edu/rrn2n/teaching/gantt.htm
 Project Management Fundamentals: Key Concepts and Methodology (Second Edition). Haugan,
Gregory T. Management Concepts. © 2011.

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 PM Tools & Techniques

14. Project Scheduling

Description and Purpose

Knowledge area: Project planning and control

The objective is to identify dependencies between tasks, assign resources for each task, identify task
start and end dates and work out the overall project duration.
Scheduling can be done for the entire project upfront or for portions thereof, such as individual stages
or iterations. Most of the time a high level schedule is established for the entire project and a detailed
schedule is created for the upcoming months.
Different scheduling methods and representations can be used. For instance, a list of dates/deadlines,
milestone plans, bar charts, network diagrams and linked bar charts can be used, and very often can
be seen as complementary to each other. The information requirements and effort for the application
of the various scheduling methods differ from one project to another. Similarly the effectiveness of
each scheduling method (or combination) depends on the type, size, complexity and dynamics, and
documentation and control requirements of each project.
Regarding scheduling there is thus not one technique that works for all projects. It is up to the project
manager to decide which tool(s) and/or technique(s) to use for his specific project.

Using the Tool/Technique

Hereafter a list of steps is mentioned to create a project schedule. The sequence of the steps also can
be different per project and some steps can be considered as optional.

Step 1: Review for completeness

 Conduct an internal review with the key resources and experts to see if all the elements of the
project scope are included in the project work plan (and/or WBS).
 Check if the following activities are properly added:
o Testing and training activities
o Relevant business implementation activities
o Transition activities
o Quality activities

Step 2: Identify the dependencies and sequence between tasks:

 For each task identify any dependency with other tasks. Most tasks are related to others. The
dependency can be one of the following:
o Start to start: both tasks have to start at the same moment
o Start to finish: the task can only start once the other is finished
o Finish to start: the task can only finish after the start of another task
o Finish to finish: both tasks need to finish at the same moment
 Sequence all tasks. Here are two possibilities. The first one is that you start scheduling
forwards and the second one is to start scheduling backwards (sometimes referred to as
reversed scheduling). The second one is used when a given deadline needs to be respected
meaning you start scheduling from that deadline with the last task to execute and you work
your way through till the start of the project. This can also give an indication on what is the
latest moment in time to start the project. A combination of both ways of scheduling is
sometimes used.
 Review the linked list to see if all tasks were taken into consideration and there are no loose
items

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PM Tools & Techniques

Step 3: Identify the critical path

During the monitoring and control the project manager must have special attention to all tasks that
are on this critical path.
 The critical path can be identified when following the reference: Error! Not a valid bookmark
self-reference..

Step 4: Identify the resources for each task

 Appoint resources for each task (hardware, software or persons)
 Add the name if known
 If this is not the case then specify the profile of the needed resources (e.g. developer, analyst,
translator,…)

Step 5: Availability of resources

Once the complete schedule is developed the name of the resources needs to be known.
 Check and agree on the availability of every resource
 If resources are over allocated figure out ways to level them to the right amount of work
 After this levelling ensure that the critical path has not changed
 If the critical path has changed see if other resource(s) can take up the work or parts of it

Step 6: Official approval of the schedule

A very important step in every project is the official approval of the project schedule (this includes the
availability of the resources).
 Get the approval by the Project Owner
 The project schedule is now base lined
 Any change to the schedule needs to follow the change management process from this
moment onwards

Figure 14.1: Project schedule

References & Sources for Further Reading

 http://www.businessdictionary.com/definition/critical-path.html#ixzz3LJIxdWgk
 http://www.projectinsight.net/project-management-basics/project-management-schedule

30
 PM Tools & Techniques

15. Critical Path Method

Description and Purpose

Knowledge area: Planning and Control

The Critical Path Method (CPM) is a modelling technique that uses a mathematically based algorithm
to calculate the total duration of a project. CPM calculates the longest necessary path (longest
unavoidable duration) of planned activities from beginning to end of the project, otherwise known as
the critical path of the project.
CPM is used widely in projects where enough detail can be derived and estimates can be relatively
accurate. CPM is particularly useful in projects with many concurrent activities, or in organisations
running many concurrent projects. In these cases, resources are often shared across multiple activities
or projects, and understanding where there is a critically for timeliness is crucial to preparing the
resource management plan.

Since the critical path represent the longest necessary path of activities, it also represent the shortest
possible duration of the project to completion. When this duration is beyond what is required,
activities can be prioritised in order to shorten the duration of the critical path. This is done by pruning
the critical path activities, performing more activities in parallel (Fast tracking) or shortening the
duration of the critical path activities by adding more resources (Crashing the Critical Path).

Figure 15.1: Critical Path Diagram

Figure 15.1 shows an example network diagram with a set of activities A through H, along with the
respective duration and inter-dependencies and the basic CPM analysis performed to find the critical
path. The activities A, B, C, D and H form the longest path or the Critical Path (CP), whereas the other
activities (E, F and G) are off the critical path and can be delayed or extended until a certain point
without delaying the completion of the overall project.

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PM Tools & Techniques

Overall, a Gantt chart is a useful technique which can also be used for planning and communication
purposes. However, Gantt charts for a larger project with many tasks can become crowded and lose
the positive aspect of simplicity. In these large Gantt charts, choosing the right level of granularity is
crucial to ensure that the visual remains useful and easy to communicate.

Note, however, that projects are often much more complex than what can be represented even in a
detailed Gantt chart. In such cases, a Gantt chart cannot be used on its own as it cannot include all the
critical information and project dynamics required for managing a project, particularly larger or more
complex projects.

The following steps are typically used to create a Gantt Chart:

Step 1:
 Define the project's Work Breakdown (WB)
Step 2:
 Identify the duration of each task
Step 3:
 Identify the dependencies between tasks and activities in the WBS
Step 4:
 Define the sequence of tasks in the project
Step 5:
 Map the summary and terminal elements of the WBS on the Y-axis of a graph, and the
duration on the x-axis of the graph
Step 6:
 Create horizontal bars to depict the length of each WB element, and connect the
dependencies identified in step 3
Currently, the most simplistic method to create a Gantt chart for a small project, as it does not involve
many parallel tasks, is by the use of a spread sheet software tool. In the case of large organisations or
projects, the use of dedicated tools that include Gantt chart capabilities is more advisable. In addition,
dedicated tools provide many other views of a project than simply a Gantt chart, which is a very useful
feature for those with knowledge of using the tool.

References & Sources for Further Reading

 http://www.netmba.com/operations/project/gantt/
 http://en.wikipedia.org/wiki/Gantt chart
 http://www.ganttchart.com/
 Painless Project Management: A Step-by-Step Guide for Planning, Executing and Managing Projects.
Pamela McGhee and Peter McAliney, John Wiley & Sons © 2007.
 Project Management Fundamentals: Key Concepts and Methodology. Haugan, Gregory T., Second
Edition. Management Concepts. © 2011.

34
PM Tools & Techniques

External:
 Constraints could arise based on the desires and needs of a third party involved. For example:
equipment has to be purchased from a third party before you are able to start the
configuration of the equipment.

Taking into account the identified constraints, resources levelling can be performed. Resource levelling
can for example require the delay of tasks until resources are available. Within a larger organisation,
resources could also be allocated across multiple, simultaneous projects. Therefore, resource levelling
could result in a delay of the project finish date if the tasks affected would be within the critical path.

The Critical Path Method is commonly used as a basis for levelling. Project Managers (PMs) use the
following techniques in order to resolve resource constraints:

 Increasing the timeline or schedule of the project so that both cost and scope of the project
are respected
 Reducing the scope of the project so that both time and cost of the project are respected
 Increasing the cost so that both the time and scope of the project are respected. Techniques
to this are:
o Fast Tracking: The critical path tasks are performed in parallel (instead of sequential).
This increases the risk and the possibility of rework.
o Crashing: More resources are added to the critical path tasks to maintain the project
timeline. This results often in higher costs.

Certain IT tools, such as Microsoft Project, provide functionality to automatically level resources by
making one of the three project constraints (cost, scope and time) variable.

References & Sources for Further Reading

 http://www.project-management-
basics.com/project management 161 Resource levelling part 1 summary.shtml#
 http://www.tutorialspoint.com/management concepts/resource leveling.htm
 http://www.projectsmart.co.uk/project-scheduling-and-resource-levelling.html
 Project Management in Practice (Fourth Edition). Samuel J. Mantel, Jr., Jack R. Meredith, Scott M.
Shafer, Margaret M. Sutton. John Wiley & Sons © 2010.
 Managing Multiple Projects. Michael S. Dobson, Deborah Singer Dobson. AMA © 2011.

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PM Tools & Techniques

Using the Tool/Technique

Described below are the steps to apply the Critical Chain Method using the example shown in Figures
18.1 and 18.2.

Step 1: Build a CPM network diagram

 Identify the sequence of the project’s tasks
 Estimate the duration of each task
 Build the CPM network diagram
 The result is a project with a duration of 65 days and a critical path of activities A,B,C,D and H
Step 2: Assign resources to tasks and level resources
 Assign the available resources to the project tasks
 Schedule activities on a Gantt chart
 Level resources so a single resource is not working on multiple tasks at the same time
 Identify the new critical path based on the resource constrained project schedule
 The result is a project with a duration of 80 days and a critical path of activities A,B,C,D,E ,H
Step 3: Reduce activity estimates
 Reduce the duration of project activities by 50%
 The result is a project with a duration of 40 days and a critical path of activities A,B,C,D,E,H
Step 4: Add buffers to the schedule
 Add a project buffer at the end of the project of 20 days, equal to 50% of the revised duration
 Add feeding buffers to the non-critical chain after tasks F and G to account for potential delays
 The result is a project with a duration of 60 days and a critical path of activities A,B,C,D,E and
H, which is 25% less than before applying CCM

When applying CCM it is important to always keep in mind that resources allocated to an activity are
encouraged to complete work at the fastest speed possible, and are not allowed to work on multiple
tasks at the same time. In addition, it is important to openly communicate with resources and to
provide them with clear and aligned priorities about the status of the critical chain, so that they are
only focussed towards the project deadline.

References & Sources for Further Reading

 http://leadershipchamps.wordpress.com/2008/11/18/what-is-critical-chain-method-in-project-
scheduling/
 http://eight2late.wordpress.com/2009/08/20/an-introduction-to-the-critical-chain-method/
 http://www.refresher.com/CriticalChainProjectManagement.pdf
 http://www.goldratt.co.uk/resources/critical chain/index.html
 Critical Chain Project Management. Lawrence P. Leach. Artech House © 2005.
 The Theory of Constraints: Practice and Research. Boaz Ronen. IOS Press © 2005.

38
 PM Tools & Techniques

Even though EVM metrics are largely objective, they are still subject to not only interpretation, but
also estimation error or bias on behalf of the Project Manager. Namely, EV is derived based on the %
complete of a work package, and is an estimate provided by the Project Manager and the project
team. In addition, the accuracy of PV is subject to the experience and information available to the
Project Manager during the planning phase of the project. PV and EV are then most accurate when the
Work Breakdown Structure (WBS) is very detailed and work packages are small in cost and duration.

Overall, EVM is a useful tool to manage project financials and performance. However, it only takes into
account quantitative aspects and ignores qualitative KPIs reflective of domains such as quality. EVM is
demanding in terms of project set-up because it requires a good reliable project plan, and in terms of
project monitoring and controlling because it requires measuring, gathering and tracking all necessary
indicators.

References & Sources for Further Reading

 http://www.projectsmart.co.uk/earned-value-management-explained.html
 http://www.tutorialspoint.com/earn value management/schedule variance.htm
 http://www.innovativeprojectguide.com/pmp-exam/6-pmp-exam/143-definition-of-evm-
formulas.html
 http://www.methodsandtools.com/archive/archive.php?id=61
 Earned Value Project Management. Fleming, Quentin W., and Joel M. Koppelman. Fourth Edition.
Project Management Institute. © 2010

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PM Tools & Techniques

Using the Tool/Technique

The Ishikawa or Fishbone diagram is used to find the root cause of a problem in a project. Project
Managers (PMs) may involve a small team to brainstorm on the problem statement so as to take into
account and minimise the impact of each major cause on the project. The Fishbone diagram can be
used for different purposes in a project:

 To analyse and identify root causes of a problem

 To identify bottlenecks in business processes throughout the organisation

Following are the steps to analyse and identify root causes by the use of a Fishbone diagram:

Step 1:
 Identify the problem in the project and the different cause categories, such as the nature of
issue, frequency, and people involved in the process, etc.

Step 2:
 Analyse the cause categories involved in the problem
 These cause categories could differ for each and every problem or project

Step 3:
 Start analysing the primary and secondary causes for each cause identified
 The problem statement, the primary and secondary causes are illustrated on the Fishbone
diagram

Step 4:
 The Fishbone diagram is analysed by the project team focussing on one factor at a time
 For detailed investigations, action items are noted for each factor in terms of additional
information required (ex.: surveys to be conducted, questionnaires to be sent, etc.)
 Solutions on how to tackle the identified cause and effects within the project are developed

While analysing a problem using a Fishbone diagram, the scope should be manageable. The factors
should not be too broad so that it does not make the analysis difficult using the diagram. The team
should not spend too much time debating on where to place a primary or secondary cause. However,
it is important to build the right diagram for a thoughtful discussion. It is also important to find
solutions for each of the identified cause and effects of the problem statement.

References & Sources for Further Reading

 http://www.isixsigma.com/tools-templates/cause-effect/cause-and-effect-aka-fishbone-diagram/
 http://www.mindtools.com/pages/article/newTMC 03.htm
 http://asq.org/learn-about-quality/cause-analysis-tools/overview/fishbone.html
 Lean Sigma: A Practitioner’s Guide. Dr. Ian Wedgwood, Prentice Hall © 2006.
 Statistics for Six Sigma Made Easy. Warren Brussee, The McGraw-Hill Companies © 2004.

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PM Tools & Techniques

Using the Tool/Technique

Described below are the steps to be followed when using the Delphi technique:

Step 1:
 Choose a facilitator who can moderate a panel discussion based on research, data collection
and feedback from experts

Step 2:
 Identify the experts for the panel discussion
 The panel may include the project team, client, industry experts, subject matter experts

Step 3:
 The facilitator presents the problem to the panel, so that the panel understands the issue at
hand and that the experts can express their views clearly

Step 4:
 The facilitator issues questions for Round N (1, 2, 3…) to the panel through questionnaires or
surveys
 The panel provides the feedback anonymously

Step 5:
 Based on the feedback from the previous round, the facilitator moderates the discussion
 The facilitator collects and summarises the discussion in order to build a consensus

Step 6:
 If consensus is not reached, the process is repeated as of Step 4
 If consensus is reached, the facilitator concludes the discussion and issues a summary report
containing future events, as well as a plan to tackle each impact to the project

Although the Delphi technique cannot predict the exact future events with certainty, it can however,
based on the opinion of an expert panel, help the project team to understand and take into account
the impact of potential future events, resulting in a more effective and efficient completion of the
project.

References & Sources for Further Reading

 http://www.projectsmart.co.uk/delphi-technique-a-step-by-step-guide.html
 http://www.seanet.com/~barkonwd/school/DELPHI.HTM
 Management Research Methodology: Integration of Principles, Methods and Techniques (Third
Edition). K. N. Krishnaswamy, Appa Iyer Sivakumar and M. Mathirajan. Pearson. © 2009.
 Gazing into the Oracle: The Delphi Method and Its Application to Social Policy and Public Health.
Michael Adler. Jessica Kingsley Publishers © 1996.

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PM Tools & Techniques

Using the Tool/Technique

The PDCA cycle enables a project Manager to be methodical in the approach of process improvement
or control. The following are the key steps involved in the PDCA cycle:

Plan:
 This step identifies problems related to the achievement of a project objective or execution.
This can be found out by several methods like the 5 Whys, Root Cause Analysis, and Fishbone
Diagrams, which are also described in this document. The problem statement outlines the
expected output from the solution.
Do:
 In this step, several possible solutions are identified. The best alternative is chosen and
applied within the project. This small scale pilot could be involving few resources, limited
geographic area, new business processes, etc.
Check:
 This step measures the effectiveness of the solution applied and analyses the outcome. It
identifies the areas of improvement in the solution and refines the processes. The “Do-Check”
steps are repeated until a feasible solution is reached which is in line with the expected output
defined in the Plan phase.
Act:
 The solution, with corrective actions identified in the previous phase, is now implemented to
the problem as a whole. The process may not end at this step. In case of continuous process
improvement, the complete PDCA cycle is repeated to keep improving the project
management processes.

The Project Manager (PM) will define any process improvement objectives and run through the PDCA
cycles to achieve each of the improvement objectives. The PDCA cycle can be run or cycled multiple
times to ensure that the team achieves the improvement objectives. This iterative exercise is a
structured way to find and evaluate solutions before any of these solutions are implemented without
proper analysis, foresight and control.

Though the PDCA cycle is a well-structured and methodological process, it has a few limitations. This
method cannot be applied in emergency situations where a quick fix needs to be applied. The process
is time consuming and hence needs to be applied in projects where there is time available for
brainstorming and the implementation of pilot runs. The PDCA cycle is also not effective in adaptive
scenarios where finding a solution is difficult due to high complexity or uncertainty in the system.

References & Sources for Further Reading

 http://www.mindtools.com/pages/article/newPPM 89.htm
 http://vectorstudy.com/management-theories/pdca
 http://www.valuebasedmanagement.net/methods demingcycle.html
 Management Systems and Organizational Performance: The Search for Excellence Beyond, Martin F.
Stankard. Praeger Publishers © 2002.
 Leading and Managing the Lean Management Process, Gene Fliedner, Business Expert Press © 2011.

48
 PM Tools & Techniques

23. Make or Buy Analysis

Description and Purpose

Knowledge area: Project Procurement Management

A Make or Buy Analysis helps the organisation to take an informed decision about what to outsource
and what not to outsource. In organisations, portfolio managers and project sponsors are often faced
with the dilemma to make or buy, considering the availability and skills of resources at hand. Project
teams can also use this tool to justify the reasons for the project in a business case, whereby the "buy"
option is an alternative to the preferred choice to "make".

The following lists the potential reasons for which organisations may go ahead with either a Make or a
Buy decision:

Potential reasons to make:

 Cost effectiveness
 Intellectual property concerns
 Quality control issues
 Supplier unreliability

Potential reasons to buy:

 Cost considerations
 Lack of technical expertise
 Supplier technical experience
 Insufficient resources in house

The changes in the external environment trigger the question of Make or Buy. The various factors that
should be considered for this analysis are: cost comparison, technology and business processes,
supplier related information, and support systems. A final decision on Make or Buy is made after a
detailed analysis of the previous mentioned factors and the effect on the overall performance
measures related to the project. Figure 23.1 below illustrates the Make or Buy Analysis framework to
make a decision.

External Environment triggers

Make or Buy decisions

Technology and
Cost Factors Supply Factors Support Systems
Business Processes

Performance Measures

Figure 23.1: Make or Buy Analysis Framework

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PM Tools & Techniques

Using the Tool/Technique

The Make or Buy Analysis is performed in order to analyse critical factors within the external
environment which could have an impact on the cost structure, quality or supplier relationship of the
organisation. These external factors consist of the competition, political elements, social benefits,
environmental elements etc.

Following steps are used to conduct a Make or Buy Analysis:

Step 1: Preparation
 A team is created for the analysis to be done, with an assigned team leader and a defined
objective. The team leader assigns roles and responsibilities for each team member to carry
out during the analysis

Step 2: Data Collection

 With relation to the total cost of ownership or the life cycle cost, the team collects data on
several factors in order to obtain a solid basis for the Make or Buy analysis.
o Cost Factors: In House Cost, Acquisition Cost
o Technology and Business Processes: Technical Skills, Quality Measures, Technology,
Process Ownership
o Supply Factors: Supplier Capabilities, Supplier Selection, Quality Control
o Support Systems: Information System, Quality Check System, Technical Support

Step 3: Data Analysis and Decision

 Weights and Ratings are applied to qualitative factors to compare the metrics. Overall cost
Figures are calculated for In House cost and Acquisition cost. It is made sure that all the
relevant factors are accounted for in the data analysis. A decision is made to Make or Buy. A
sensitivity analysis is done to test the robustness of the final decision

Step 4: Feedback
 Feedback concerning the final Make or Buy decision is provided to relevant stakeholders. The
decision is supported with the analysis of all the factors involved

The large availability of specialised suppliers delivering high quality solutions, as well as the
proliferation of easily configurable out of the box solutions, often makes the buy option lower in cost.
As a result, it is often difficult to justify taking the make option as the preferred way forward.
Conducting the make or buy analysis generates more informed decisions, and adds to the
transparency of the process of selecting new products or services.

References & Sources for Further Reading

 http://smallbusiness.chron.com/to-qualitative-measures-makeorbuy-decisions-35918.html
 http://accountingexplained.com/managerial/relevant-costing/make-or-buy-decision
 http://www.tutorialspoint.com/management concepts/the make or buy decision.htm
 Introduction to Project Management. Kathy Schwalbe. Course Technology © 2006.
 Management Accounting for Business (Third edition). Colin Drury. Thomson Learning © 2006.

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PM Tools & Techniques

Using the Tool/Technique

The 10 Cs of supplier evaluation technique is a comprehensive list to standardise the evaluation of
suppliers. The description of each of the ten factors of this technique is provided.

Competency
 This evaluates whether the supplier has the capabilities to deliver the products/services to be
procured. For example, views from other customers regarding the supplier can be considered.
Capacity
 This factor indicates whether the supplier has enough capacity to fulfil the requirements. For
example, the supplier should be flexible so that it can handle fluctuations in demand.
Commitment
 The supplier should ensure that it has proper standards and quality systems in place to ensure
a continuous supply of qualitative products or services.
Control
 This factor evaluates the control capability of the supplier regarding its policies, procedures
and processes in order to ensure a consistent performance.
Cash
 The supplier should be financially strong in order to survive through a rough economy,
without jeopardizing the requested qualitative products or services.
Cost
 This is the total cost of all products or services to be supplied. The cost, along with all the
other factors, should be considered while evaluating a supplier.
Consistency
 The supplier should demonstrate that it has proper procedures and processes in place to
ensure a timely supply of qualitative products or services.
Culture
 To ensure a good relationship, the supplier should have similar cultural values as the
organisation. This ensures that both value the same principles for a lasting relationship.
Clean
 The supplier should ensure that is has sustainability policies in place related to environment
laws and best industry practices.
Communication
 This factor relates to the communication channels to be used by the supplier for notifications,
handling crisis situations and who would be the point of contact within the organisation.

The 10 Cs of supplier evaluation technique tends to change the focus compared to traditional ways of
evaluation, which mainly look at the cost. All factors are important with regards to supplier evaluation,
which would result not only in lower costs but also in consistency and reliability of the supply of the
requested qualitative products or services.

References & Sources for Further Reading

 http://www.mindtools.com/pages/article/10-cs.htm
 http://www.valuestreamguru.com/?p=401
 http://supplychain-mechanic.com/?p=320
 Integrated Materials Management (First Edition), Ray J Carter and P M Price. Pearson Education
©1998.

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PM Tools & Techniques

Using the Tool/Technique

Proposals should be evaluated in a standardised manner so that there is fairness and openness about
the complete selection process. Following, are the steps to evaluate proposals:

Step 1: Plan and design the Request for Proposal and the Evaluation
 Identify the project or contract objectives and the purpose it will serve in the long term
 Determine the evaluation criteria covering all project objectives
 Criteria could include several factors like cost, capability, duration and resource skills
 Prepare evaluation matrix with weights for each criterion and each supplier
 The criteria are reviewed with the central procurement team or other stakeholder
 Design the RFP and send it to all the identified vendors or suppliers
Step 2: Form the Evaluation Team
 As per the criteria identified include subject matter experts in the evaluation team
 Determine team approach in deciding on number of panels and members in the panel
 Assign roles and responsibilities to each team member with decision-making authority
Step 3: Conduct the Evaluation
 Collate data from RFPs and calculate Total Score for each proposal using the matrix
 Analyse the Total Scores of each proposal and any trade off scenarios for each supplier
 Document results and different business scenarios with advantages and disadvantages
Step 4: Finalisation
 Publish the final results
 Hold negotiations with prospective suppliers for any clarifications required based on the
inputs provided in the RFP
 Assign a contract or project to the best identified vendor or supplier based on the negotiations
and feedback

Some key points should be kept in mind during the process of the proposal evaluation:

 A well-defined evaluation criteria should be outlined in the RFP for supplier selection
 It is important to document shortfalls, assumptions and areas of risk for each proposal
 The RFP specifications must be clear and avoid ambiguity
 Evaluation ratings and weights of criteria should be applied consistently for all suppliers
 It is important to define a minimum acceptable score per criteria and in total, particularly if
only one supplier is answering to the RFP

While using the trade-off method for proposal evaluation, there may not always be a clear
recommendation. There may be risks and uncertainties attached to costs, benefits or both. Some of
quantify certain areas of the proposal in order to fit the criteria and evaluation matrix. Qualitative
notes should be prepared taking assistance of subject matter experts for these factors.

Updates to the evaluation criteria or the proposal evaluation process should be documented, so that it
can be used in the next cycle of proposal evaluation.

References & Sources for Further Reading

 http://www.business.vic.gov.au/operating-a-business/developing-your-business/government-
tenders/evaluation-process
 http://tricare.mil/tma/ams/ams propguide.aspx
 http://tapuniversity.com/2009/07/20/proposal-evaluation-techniques/
 Supplier Evaluation and Performance Excellence: A Guide to Meaningful Metrics and Successful
Results. Sherry R Gordon. J. Ross Publishing Inc. © 2008.
 Project Management Concepts, Methods, and Techniques. Claude H. Maley. CRC Press © 2012.

54
PM Tools & Techniques

Step 3:
 Determine the frequency of occurrence for each cause category identified in Step 2

Step 4:
 Arrange the cause categories on a histogram with the highest to the lowest frequency of
occurrence
 Add a cumulative contribution in percentage terms on the right vertical axis to complete the
Pareto Chart

Step 5:
 Identify the top problem categories contributing to 80% of the causes from the Pareto chart
 Use root cause analysis methods to drill down on these top causes to find solutions

Sometimes the top problem category identified may be too broad to address. In this case a second
level Pareto analysis may be conducted on the large problem category. This enables to break down the
analysis so as to apply the right solution to the right problem category.

One of the limitations of the Pareto analysis is that it might overlook smaller project issues, which
actually grow bigger with time. Due to low probability or existence of such an issue, it might not get
addressed. However, a small issue might be the root cause of a large problem in the future. In such
cases the Pareto Analysis can be performed at different time intervals in order to understand the top
issues in different phases of the project.

References & Sources for Further Reading

 http://project-management-knowledge.com/definitions/p/pareto-chart/
 http://www.mindtools.com/pages/article/newTED 01.htm
 http://www.processexcellencenetwork.com/six-sigma-quality/articles/using-pareto-analysis-to-divide-
and-conquer-impro/
 The 80/20 Principle: The Secret to Achieving More with Less. Richard Koch. The Doubleday Publishing
Group © 2008.
 Pareto's 80/20 Rule for Corporate Accountants (First Edition). David Parmenter. John Wiley & Sons
Inc. © 2007.

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PM Tools & Techniques

Using the Tool/Technique

Each step of the project assessment and effectiveness measurement framework, shown in Figure 27.1,
is explained in more detail below:

Step 1: Measurement Goals

 The Project Management structure – including roles and responsibilities - should be well
defined as to provide support to the entire team
 Define the organisation of decision making for each role within the team
 Identify project goals and objectives as well as any operational issues
 Request the commitment of all project team members for active participation

Step 2: Measurement Process

 Data on various project functions, as defined in the measurement goals, is collected
 Project team members are encouraged to be open and objective in sharing the data
 The data is collated and organised to feed into the measurement analysis

Step 3: Measurement Analysis

 The data is analysed in the quantitative and qualitative forms, composed out of metrics and
qualitative notes
 These metrics and notes are then compared to the project goals and objectives
 The measurement criteria of the metrics are also analysed in order to identify the possible
need of changing them

Step 4: Correction and Improvement

 The stakeholders of the project or the Project Managers (PMs) are provided with the analysis
of the corresponding metrics
 Corrective actions are defined and recommended in order to enable process improvement
 The team also suggests improvements for the overall measurement process as to meet the
needs of the stakeholders and Project Managers (PMs)

A checklist can be used to quickly identify whether all activities of the measurement process have
been completed. The checklist should have several questions to assess the way the process of
measurement was conducted.

With the changing project environment the measurement process and criteria also need to keep
changing and evolving. Ensuring that the Project Assessment and Effectiveness measurement process
in in place and adopted can greatly increase the likelihood that the organisation benefits from the
project.

References & Sources for Further Reading

 http://www.distributive.com/Measurement-Process-Effectiveness.pdf
 http://www.managementstudyguide.com/process-effectiveness-measurement.htm
 http://www.genpact.com/docs/resource-/genpact-cfo-paper-
going beyond process efficiency8C02BE46B294
 Effective Project Management: Traditional, Agile, Extreme (Fifth Edition). Robert K. Wysocki. Wiley
Publishing Inc. © 2011.
 Auditing for Process Performance: Combining Conformance and Effectiveness to Meet Customer
Satisfaction. Chad Kymal. ASQ Quality Press © 2011.

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 PM Tools & Techniques

28. SECI Model - The Knowledge Spiral

Description and Purpose

Knowledge area: Knowledge Management and Lessons Learned

The SECI (Socialisation, Externalisation, Combination, and Internalisation) model is a framework within
the practise of knowledge creation. New knowledge is created by moving from tacit to explicit
knowledge and back as a continuous process. Understanding the knowledge creation process in a
project is very important so that the project team is able to generate and share knowledge.

Understanding how knowledge and skills evolve and are transferred in and between project team
members is key to ensuring consistent and continuous levels of project performance and quality.

The continuous process of knowledge creation in a project involves two types of knowledge:

 Tacit Knowledge: personal, context specific, hard to formalise and communicate

 Explicit Knowledge: easily transmittable in a formal and systematic language

The SECI Model postulates that knowledge creation takes place when tacit and explicit knowledge
interact. There are four ways in which knowledge can be created:

 Socialisation: Tacit to Tacit knowledge transfer happens through face-to-face interactions or

knowledge sharing experiences
 Externalisation: Tacit to Explicit knowledge transfer happens through writing or publishing
documents, images, concepts, etc.
 Combination: Explicit to Explicit knowledge transfer happens by organising or combining
different sources of explicit knowledge
 Internalisation: Explicit to tacit knowledge transfer happens through receiving knowledge and
applying that in a real scenario

Tacit Tacit

Tacit Socialisation Externalisation Explicit

Tacit Internalisation Combination Explicit

Explicit Explicit

Figure 28.1: SECI Model

59
PM Tools & Techniques

Using the Tool/Technique

The SECI Model explains the theory of knowledge creation through a continuous process. Project team
members go through different stages of knowledge creation while working on a project. Below is a
description of the four stages of the SECI Model:

Step 1: Socialisation
 During the first stage of the process the knowledge is in the tacit form. The key to acquire such
knowledge from an expert is through socialising by face-to-face interactions, meetings,
brainstorming workshops and sharing knowledge experiences

Step 2: Externalisation
 The next step of converting tacit to explicit knowledge can be done through capturing the
acquired tacit knowledge in written or graphical formats. The project team captures the
knowledge gathered in the first stage by documenting concepts, models, hypothesis, graphics,
analogies, metaphors, etc.

Step 3: Combination
 This stage combines explicit knowledge, captured from several sources, into one area.
Knowledge documented from various sources is synthesised as to compare different models,
concepts or hypothesis. This generalises several theories and compares the advantages and
disadvantages of different elements

Step 4: Internalisation
 By putting this model into practice, the concepts and processes combined from different
sources in previous stages can be taken to the next level. Through action and reflection of
applying the knowledge, the information is internalised. This leads to the creation of new tacit
knowledge, after which the cycle is repeated by going back to Step 1

The knowledge created in a subsequent cycle of the SECI model will always be a higher level. The more
this cycle is repeated, the better the generated knowledge will be. Each stage, iteration and
implementation leads to new knowledge.

References & Sources for Further Reading

 http://knowledgeandmanagement.wordpress.com/seci-model-nonaka-takeuchi/
 http://www.knowledge-management-tools.net/knowledge-conversion.html
 http://www.dubberly.com/articles/design-as-learning.html
 Key Issues in the New Knowledge Management. Joseph M. Firestone and Mark W. McElroy.
Butterworth-Heinemann © 2003.
 Challenges and Issues in Knowledge Management. Anthony F. Buono and Flemming Poulfel.
Information Age Publishing Inc. © 2005.

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PM Tools & Techniques

Step 3: Group into Opportunities

 The ideas are grouped based on common themes and related project lessons
 The Project Manager facilitates the process of grouping the opportunities and lessons learned
in order to eliminate duplication

Step 4: Prioritise
 Once the opportunities and lessons learned are grouped, they are prioritised for greater focus
 This also serves as a review session for all lessons learned and prioritised opportunities

Step 5: Identify and Assign Actions

 For the high priority opportunities, the team brainstorms on how to approach them
 Actions to be taken, as well as target dates regarding specific opportunities, should be
assigned to team members or Project Managers (PMs)
 Reviews for each of the priority opportunity areas should be conducted when appropriate
actions have been taken

Lessons learned can also be captured on a regular basis and archived. This archive could serve as a
starting documentation for project teams to execute similar projects.

References & Sources for Further Reading

 http://www.ginaabudi.com/capturing-those-lessons-learned/
 http://pm-foundations.com/2011/09/13/pm-foundations-%E2%80%93-an-effective-lessons-learned-
process/
 http://www.helium.com/items/2144807-project-management-how-to-effectively-capture-lessons-
learned
 Project Management: Fast Track to Success. Patrick Harper-Smith & Simon Derry. Pearson © 2012.
 The Basics of Project Evaluation and Lessons Learned. Willis H. Thomas. CRC Press © 2011

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