If you studied to take your Project Management Professional (PMP)® exam using A Guide to the Project Management Body of Knowledge (PMBOK® Guide) fourth edition and had to reschedule your exam date to on/after July 31, 2013, then you now have to take the PMP Exam based on the new PMBOK® Guide fifth edition. The Project Management Institute (PMI)® will not make any exceptions to this rule.
There are notable changes between version four and version five of the PMBOK® Guide. For instance the number of Knowledge Areas has been increased from 9 to 10 and the number of processes has been increased from 42 to 47. But this change is only simple if you look at it numerically. It is much more complex under the hood. Here’s an example:
The new Knowledge Area is called Project Stakeholder Management and was added to emphasize the importance of good stakeholder management on all projects. It contains four processes. Two of these processes were renamed and moved here from Project Communications Management. Two are new processes. That leaves three new processes that were added in other Knowledge Areas throughout the guide. In addition many more processes were renamed.
Appendix X1 in the PMBOK® Guide fifth edition describes the bulk of the changes. A number of authors have also described these changes and made their analysis available on the web. A quick search for “PMBOK 5 changes” will find them. It is, however, important to note that these articles don't list all the detailed changes. For instance, the inputs, tools & techniques and outputs of almost every single process have changed. Some ITTOs have been removed and new ones have been added. You will therefore not find a complete description of all the changes.
Because of this large amount of changes throughout the PMBOK® Guide it is impossible to simply "study the difference". The changes are sometimes conceptual, sometimes dramatic and sometimes minor. But they are here and your PMP Exam may require you to know them. "Upgrading" your knowledge from the fourth to the fifth edition can therefore not be done "change-by-change". You have to apply a holistic approach.
However, it must also be said that just because the PMBOK® Guide has changed, project management itself hasn't changed. The fundamental way in which projects are managed is still the same. The PMBOK® Guide is simply our general framework describing the activities & techniques that are commonly accepted to be good practices on most projects most of the time. And just because the PMBOK® Guide has changed its Project Cost Management Knowledge Area from three to four processes doesn't mean that Earned Value systems need to be changed as well.
But in order to pass your PMP exam you will need to be aware of the new definitions in the PMBOK® Guide. Studying them takes effort, dedication and time. Here is a possible study approach to "upgrade" yourself to the PMBOK® Guide fifth edition:
1) Study Appendix X1 and familiarize yourself with the changes. In particular: Familiarize yourself with the processes that have been added, moved or renamed and learn the new process names.
2) Study Appendix X3 and familiarize yourself with the Interpersonal Skills a project manager should have.
3) Study Annex A1 - The Standard for Project Management of a Project. Here you want to Study the short descriptions for each of the five process groups and for each of the 47 processes.
4) Study table 3-1 on page 61 and know which process belongs to which process group. (You will find that it contains the same information as Table A1-1 in Annex A1). For the exam it is a good idea to be able to start with a blank piece of paper and draw this table from memory.
5) Study table 4-1 on page 78 and know which documents are part of the project management plan and which ones are "just" other project documents.
6) And finally (and unfortunately): Study the complete PMBOK® Guide 5th edition twice.
When studying the new PMBOK® Guide familiarize yourself with the new inputs, tools & techniques and outputs of all the processes. A good approach is to study the Data Flow Diagram for each of the 47 processes. These diagrams illustrate the flow of the inputs and outputs and will strengthen your understanding of how they move between the many processes. It will also help you understand the integrated nature of all the processes in the PMBOK® Guide.
You should also get to know the new processes that have been added and make special note of the new Earned Value Calculations Summary Table 7-1 on page 224, which looks suspiciously close to a table that I developed and have published since 2009 for our PMP Exam Formula Guide…
As you might have guessed by now, "upgrading" your knowledge to this new version of the PMBOK® Guide is not something that you can do in just a day. While your PM experience is the main focus of the PMP Exam, it will also be necessary for you to have an in-depth understanding of the PMBOK® Guide fifth Edition to be able to correctly answer many of the questions the test.
I therefore recommend that you plan a minimum of two weeks of intense study.
The Questions & Answers for the Project Management Professional (PMP)® Exam is now available for download at http://traffic.libsyn.com/pmpodcast/PMP_Exam_Q_and_A.pdf
If you are already a subscriber of The Free PM PrepCast, you will get this for free together with other PMP® Exam prep resources.
These Q&A's are answers to questions asked during a Free PMP® Exam webinar held by Cornelius Fichtner, PMP, CSM. The questions and answers here cover such topic as becoming a certified PMP®, the exam application and process, preparing for the exam, exam study materials, taking the exam, and maintaining your certification after you pass the exam. Some questions and answers also address the Certified Associate in Project Management (CAPM)® exam offered by the Project Management Institute (PMI)®.
Dont' be left behind. Download your free copy now of this very valuable resource, or to get even more, be a subscriber of The Free PM PrepCast.
After eight years as a project management trainer, I have helped more than 20,000 students prepare for their Project Management Professional (PMP)® Exam. In my experience along the way, I’ve found one thing that unites them all: They all want to practice with free PMP Exam sample questions.
In an effort to help, I have identified 10 web sites that offer free PMP Exam sample questions. I recommend each of them for the quality of their questions.
The global financial marketplace has recently become quite volatile, as fears of an American recession affect economies all over the world. In addition, the Dow Jones Industrial Average currently hovers at around 12,400, while it was at around 14,000 in October 2007. A drop of 11% in just four months is cause for concern for many people.
At times like this, executives typically search for ways to cut costs, which can be a sticky business. And yet, what if you could know where your company is profitable and where it's not, and then figure out a way to do more of the profitable work? In other words, what if you got rid of unprofitable customers instead of loyal, productive employees?
The truth is, many companies that slash costs in response to an economic recession find it difficult to achieve top-line growth when the recession ends. This is not hard to believe, considering the fact that their best workers are gone and their long term projects were cancelled. A company cannot grow on short term plans alone. Overzealous cutting of people and projects can, however, be avoided, or at the very least, they can be performed with more intelligent precision. All that are required to handle such problems the right way are per-customer per-project profitability metrics.
Understanding costs is the first step to understanding profitability. Most companies know their profitability company-wide, but few of them know it on a per-product or per-customer basis. Such precision of understanding is necessary in order to develop and implement the right growth strategy.
Here is a five step process that will take your company there.
1. Current situation: “Chaos”
If you don’t know your costs on a per-project basis, then you have no way to validate future project estimates. Without knowing how long your last project took to complete, how can you determine how accurate the initial estimate was? Calibrating project estimates is not just about calendar time, since a project that was delivered on time may not have been delivered on cost. For example, some organizations provide on-time delivery by adding resources to projects that are behind schedule, and they do it without drawing attention to the fact. This is something you must know in order to avoid over-commitment and under-pricing.
You also need this information in order to repeat past successes. Not knowing which projects were on-time and on-budget means you cannot know which projects were successful, and therefore, which processes to continue following and which to improve.
Over-commitment, under-pricing, inability to repeat past successes and abandoning proven processes in times of crisis leads to chaos, which is especially dangerous during a recession.
2. Track project labor hours
Having your employees track their time on a per-project basis lets you know when projects are in trouble much earlier than you otherwise would. Contrary to what you might think, total compliance is not necessary to gain significant insight into project progress, profitability, and adherence to estimates.
The basic time tracking data you obtain from this system will surprise you. You can figure out, for example, which projects are consuming more labor hours than you thought, or which of your customers are cheap to service.
What many project managers don’t realize is that the noisiest customers are often the ones who pay you the most. While these are often labeled as "problem customers," they may account for much of your revenue. A simple basic level of employee project time utilization data can give you insight into the profitability of each customer, so you don’t have to wonder anymore.
In recessionary times, your best bet is to “fire” unprofitable customers and kiss up to the profitable ones.
3. Put labor rates on time data and track all expenses
Travel expenses represent the second largest controllable corporate expense for most companies, and some projects, products or customers utilize more travel expense than others. Collecting all this data on a per-project basis can help you understand true direct per-project cost. Once you have that, profitability is not far behind.
Now is also the time to aim for nearly 100% compliance on time and expense data collection so that management will have better insight into how to cut costs without a chainsaw.
4. Allocate indirect costs
Indirect costs, such as the cost of office space or HR, apply to different projects in different ways. There are two basic kinds of indirect costs: general indirect costs, like rent, that must be allocated across every project in the company, and semi-indirect costs, like customer relationship management, which should be applied to all projects for that customer.
Every company is different and allocation of indirect cost is specific to each company. At my company, Journyx, we allocate more marketing cost to software license sales than we do to professional services or software maintenance sales. We do this because marketing expenses are directly related to winning the customer in the first place, more than they are to maintaining the customer relationship over time. We have found that marketing matters most during the customer acquisition phase, which is when most of our licenses are sold.
You must also create a general indirect cost allocation formula for each type of indirect cost in your company.
Then there are semi-indirect costs. If you have a large customer whom you do multiple projects for, or a suite of related products that are treated as a group, there are probably some costs that apply to that group of projects, but not any particular project on its own. Examples of this include management of the customer relationship or marketing of the product suite. In this case, you may want to allocate these semi-indirect costs by revenue or by direct cost over those projects.
Another thing to note is that input from all of the managers involved is not only useful, but necessary. You may want to alter the allocation formulas over time if they are generally perceived as inaccurate, unfair, or leading to bad decisions.
Once you have allocated indirect and semi-indirect costs across all projects, you will be fully aware of what your complete per-project costs are. Whether or not you are facing a recession, you will have a very precise tool for making intelligent changes to company resource utilization and direction that are likely to lead to increased profits.
5. Universal Awareness of Per-Project Profitability
Imagine if your engineers, developers, services team and salespeople all knew which of your customers were making money for you and which were not. Wouldn't this information alter their behavior in ways that would make you more money?
Revenue - Cost = Profit
That formula may seem simple, but sometimes it is necessary to use a proxy in order to gain an understanding of per-project revenue. For example, if you manage an internal IT shop for a large Fortune 500 firm, you must ask your customers for an estimate (in dollars) of the value their projects provide to the company overall. Allocating business value delivery – a proxy for revenue – can be every bit as complex as allocating indirect costs, but it is well worth the effort.
On the other hand, if you're running a consultancy, you can use bookings or billings data right out of the CRM system.
As new data becomes available, you may have to revise your method. Yet once you have an estimate of per-project profitability, you will be in the nirvanic state of understanding per-project per-customer per-product profitability, which gives you an enormous advantage over your competitors, both during a recession and in general. You know where your profits are coming from, and they don't. Now you can cut out the unprofitable work, or at least perform it consciously if it has to be done for strategic reasons. You can also easily calculate ROI on anything and your estimates will keep improving.
An understanding of per-project profitability will make your company more solid in bad times and more flexible in good ones. When times are hard and you need to cut, you will be able to cut intelligently, with the assurance that you're making the right long term decision for the company. Though recessions come and go, having great procedures in place is the key that will allow you to weather any financial storm.
About the Author:
Curt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilized correctly and completely. Curt earned a Bachelor of Science degree in Computer Science from Virginia Tech. As a software programmer fixing bugs for IBM in the early ‘90’s, Curt found that tracking the time it took to fix each bug revealed the per-bug profitability. Curt knew that this concept of using time-tracking data to determine project profitability was a winning idea and something that companies were not doing – yet… Curt created the world's first web-based timesheet application and the foundation for the current Journyx product offerings in 1997. Learn more about Curt here.
In addition to what you can find in that article, PMI recently announced the following: If you are taking the PMP Exam on or after 31 August 2011, then - for a limited time only - PMI will not immediately tell you if you have passed or failed your exam.
Whether you are a current practitioner in program or project management or you are considering a career in this profession, you may have thought about the value of obtaining one or more project management credentials.
If you are already certified and/or have one or more credentials, you may be contemplating ‘broadening your armory’ by seeking additional credentials or certificates in program or project management. For many reasons, the three of us are believers in holding credentials. To prove our point, a quick review of our bios at the end of this article shows that we all have several program and project management credentials. So what is the benefit of obtaining one or multiple credentials? Is there a typical value against the investment in time and money?
We do not seek to discuss the merits of different project management tools and techniques, nor will we examine the differences between program and project management; rather, we put forward what we hope are thought-provoking points for you to consider.
Gareth, Gary, Jeff, and Brian are PgMP (Program Management Professional) credentialed through the Project Management Institute (PMI)¬Æ. (In fact, that's how we met, became good friends and collaborators on articles.) We know from personal experience what it takes to obtain. Additionally, in early 2010, Jeff and Brian did a study and presentation on the overall results and benefits of having the PgMP credential, based on a survey of 225 PgMPs, over half of the PgMPs credentialed at the time. Their benefits study was one of the focus topics at the 2010 PMI North America Congress in Washington, DC.
As we weigh the value of the credential, let"s first consider the PgMP credential itself. Per PMI, the PgMP credential is intended to "recognize advanced experience, skill and performance in the oversight of multiple related projects and their resources, aligned with an organizational objective." We won't be going into the formal details and process steps to obtain the credential; that information is readily available through the PMI. However, the PgMP credential process can be broken down to three main areas or steps:
You are not impervious to having troubled projects in your portfolio. Any project can fail. Even the most seasoned and skilled project manager may, at one time or another, find themselves at the helm of a troubled project. Having a project in trouble does not necessarily signal the Project Manager is doing a poor job. Projects can go off course for a variety of reasons; some reasons are outside the span of control of the Project Manager. What are some of the common causes for projects to fall into troubled waters and what are some prudent steps to get the project back on course?
If you poll a group of seasoned project professionals with the question, “What are the chief causes of Troubled Projects?” you are likely to receive a variety of responses, though quite possibly there will be some commonly attributed causes. At the macro level, we put forth that projects generally fall into trouble for one or more of three reasons; 1) Poor Planning 2) Misaligned Expectations 3) Ineffective Risk Management. Let’s elaborate on each of these points.
Let’s face it; virtual teams (where we work with colleagues in remote locations, be they close by or in different countries) are now a reality in the workplace. If this trend in the workplace environment continues, virtual working will increasingly influence the way we operate, and the ‘effective virtual team worker’ will be a valued asset. A key benefit to forming virtual teams is the ability to cost-effectively tap into a wide pool of talent from various locations. There are several definitions of the virtual team worker, but within the context of this article, we are talking about people who work on project teams and who display the following attributes:
- They work primarily from a particular office (maybe a home office, or maybe a fixed work location), and they are not expected to travel each week as a part of their job (i.e. road warrior) or be physically in the office on a daily basis.
- They likely work from home one or more days per week.
Most project managers with a few years experience or more are likely to have managed a project where some or even all of the project members were remotely located. How different is managing a virtual project team from a co-located team? Are there additional considerations or risks involved in managing a virtual team? Before we answer these questions, one must first understand the dynamics of the virtual team worker.