Actual cost (AC)
The total of direct and indirect costs incurred in accomplishing work on an activity during a given period; formerly called the actual cost of work performed (ACWP).
A cost-estimating technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project; also called top-down estimate.
The original project plan plus approved changes.
A cost-estimating technique based on estimating individual work items and summing them to get a project total.
Budget at completion (BAC)
The original total budget for a project.
A cost estimate used to allocate money into an organization’s budget.
Cash flow analysis
A method for determining the estimated annual costs and benefits for a project.
A newer, computerized cost-estimating tool based on Barry Boehm’s original model that allows one to estimate the cost, effort, and schedule when planning a new software development activity.
Cost-estimating tools that use computer software, such as spreadsheets and project management software.
Constructive Cost Model (COCOMO)
A parametric model developed by Barry Boehm for estimating software development costs.
Dollars included in a cost estimate to allow for future situations that may be partially planned for (sometimes called known unknowns) and are included in the project cost baseline.
A time-phased budget that project managers use to measure and monitor cost performance.
Allocating the overall cost estimate to individual work items to establish a baseline for measuring performance.
Controlling changes to the project budget.
Developing an approximation or estimate of the costs of the resources needed to complete the project.
Cost management plan
A document that describes how cost variances will be managed on the project.
Cost performance index (CPI)
The ratio of earned value to actual cost; can be used to estimate the projected cost to complete the project.
Cost variance (CV)
The earned value minus the actual cost.
A cost estimate that provides an accurate estimate of project costs.
Costs that can be directly related to producing the products and services of the project.
Earned value (EV)
The percentage of work actually completed multiplied by the planned cost; formerly called the budgeted cost of work performed (BCWP).
Earned value management (EVM)
A project performance measurement technique that integrates scope, time, and cost data.
Estimate at completion (EAC)
An estimate of what it will cost to complete the project based on performance to date.
Technology-independent assessments of the functions involved in developing a system.
Costs that are not directly related to the products or services of the project, but are indirectly related to performing the project.
Intangible costs or benefits
Costs or benefits that are difficult to measure in monetary terms.
Learning curve theory
A theory that states that when many items are produced repetitively, the unit cost of those items normally decreases in a regular pattern as more units are produced.
Life cycle costing
Considers the total cost of ownership, or development plus support costs, for a project.
Dollars included in a cost estimate to allow for future situations that are unpredictable (sometimes called unknown unknowns).
The additional percentage or dollar amount by which actual costs exceed estimates.
A cost-estimating technique that uses project characteristics (parameters) in a mathematical model to estimate project costs.
Planned value (PV)
The portion of the approved total cost estimate planned to be spent on an activity during a given period; formerly called the budgeted cost of work scheduled (BCWS).
The ratio between revenues and profits.
Revenues minus expenses.
Project cost management
The processes required to ensure that the project is completed within the approved budget.
Rate of performance (RP)
The ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity.
Dollars included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict.
Rough order of magnitude (ROM) estimate
A cost estimate prepared very early in the life of a project to provide a rough idea of what a project will cost.
Schedule performance index (SPI)
The ratio of earned value to planned value; can be used to estimate the projected time to complete a project.
Schedule variance (SV)
The earned value minus the planned value.
Source Lines of Code (SLOC)
A human-written line of code that is not a blank line or comment.
Money that has been spent in the past.
Tangible costs or benefits
Costs or benefits that can be easily measured in dollars
3 Project Management Processes
1 – Estimating the cost
2 – Determining the budget
3 – Controlling costs
Why do many projects never finish?
Cost management problems cause many problems to never finish.
What are most executives concerned with more than other issues?
When do organizations have a history of not spending enough money and what does it impact?
They have a history of not spending enough money in the early phases of projects and it impacts the total cost of ownership.
Why is cash flow important?
If top management selects too many projects that have high cash flow needs in the same year, the company will not be able to support all of its projects and maintain profitability.
Why is it important to define clearly the year on which the company bases its dollar amounts?
If a company bases all costs on a previous years estimates it would need to account for inflation and other factors when projecting costs and benefits in future-year dollars.
3 basic types of estimates
1 – Rough order of magnitude (ROM)
2 – Budgetary estimate
3 – Definitive estimate
Earned value management involves calculating which three values for each activity or summary activity from a project’s WBS?
1 – Planned Value
2 – Actual Cost
3 – Earned Value
_______ is a resource sacrificed or foregone to achieve a specific objective or something given up in exchange.
What is the main goal of project cost management?
to complete a project within an approved budget.
If a company loses $5 for every $100 in revenue for a certain product, what is the profit margin for that product?
______ reserves allow for future situations that are unpredictable.
You are preparing a cost estimate for a building based on its location, purpose, number of square feet, and other characteristics. What cost estimating technique are you using?
______ involves allocating the project cost estimate to individual work items over time.
Project cost budgeting
_____ is a project performance measurement technique that integrates scope, time, and cost data.
Earned value analysis
If the actual cost for a WBS item is over $1500 and its earned value was $2000, what is its cost variance, and is it under or over budget?
The cost variance is $500, which is under budget
If a project is halfway completed and its schedule performance index is 110 percent and its cost performance index is 95 percent, how is it progressing?
It is ahead of schedule and over budget.
The ________ is the additional percentage or dollar amount by which actual costs exceed estimates.
Which of the following processes of project cost management involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance?
Which of the following processes of project cost management involves developing an approximation of the costs of the resources needed to complete a project?
The main outputs of the ________ process are work performance measurements, budget forecasts, organizational process asset updates, change requests, project management plan updates, and project document updates.
To increase ________, a company can increase revenues, decrease expenses, or try to do both.
A company might complete a project to develop and implement a new customer service system in one or two years, but the new system could be in place for ten years. Project managers should create estimates of the costs and benefits of the project for ten years. This is an example of ________.
life cycle costing
Avoid ________ when deciding what project to invest in or continue.
________ for projects often include items like goodwill, prestige, and general statements of improved productivity that an organization cannot easily translate into dollar amounts.
________ are used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.
Which type of estimate is done very early in a project or even before a project is officially started?
rough order of magnitude (ROM) estimate
The drawback with ________ is that they are usually time-intensive and therefore expensive to develop.
A ________ might provide an estimate of $50 per line of code for a software development project based on the programming language the project is using, the level of expertise of the programmers, the size and complexity of the data involved, and so on.
Which type of estimate uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project?
A(n) ________ is a time-phased budget that project managers use to measure and monitor cost performance.
The ________ is an estimate of the value of the physical work actually completed.
earned value (EV)
Suppose a project included a summary activity of purchasing and installing a new Web server. Suppose further that, according to the plan, it would take one week and cost a total of $10,000 for the labor hours, hardware, and software involved. The ________ for that activity that week is, therefore, $10,000.
planned value (PV)
What is the earned value minus the actual cost?
cost variance (CV)
What is the ratio of earned value to planned value and can be used to estimate the projected time to complete the project?
schedule performance index (SPI)
Which of the following is the earned value minus the planned value?
schedule variance (SV)
What is the ratio of earned value to actual cost and can be used to estimate the projected cost of completing the project?
cost of performance index (CPI)
using punishment, threats, or other negative approaches to get people to do things they do not want to do
deputy project managers
people who fill in for project managers in their absence and assist them as needed similar to the role of a vice president
listening with the intent to understand
using one’s personal knowledge and expertise to get people to change their behavior
causes people to do something fora reword or to avoid a penalty
hierarchy of needs
a pyramid structure illustrating maslows theory that peoples behaviors are guided or motivated by a sequence of needs
causes people to participate in an activity for their own enjoyment
getting people to do things based on a position of authority
matching certain behaviors of the other person
organizational breakdown structure
a specific type of organizational chart that shows which organizational units are responsible for which work items
getting people to do things they would not otherwise do
a relation of harmony conformity accord or affinity
getting people to do things based on an individual’s personal charisma
A column chart that shows the number of resources required or assigned to a project over time
A technique for resolving resources conflicts by delaying tasks.
amt of individual resources required during specific time periods.
responsibility assignment matrix
matrix that maps the work of the project as described in the WBS to the people responsible for performing the work as described int he organizational breakdown structure
using incentives to induce people to do things
people responsible for managing the subprojects that a large project might be broken into
an approach where the whole is greater than the sum of the parts
Project Human Resource Management
Making the most effective use of the people involved with a project
4 steps for defining and assigning work
1. Finalizing project requirements
2. Defining how the work will be accomplished
3. Breaking down the work into manageable elements
4. Assigning work responsibilities
5 dysfunctions of teams
1 – Absence of trust
2 – Fear of conflict
3 – Lack of commitment
4 – Avoidance of accountability
5 – Inattention to results
a tool for managing project teams where the project manager documents, monitors, and tracks issues that need to be resolved in order for the project to run smoothly
when more resources than are available are assigned to perform work at a given time
charts that show Responsibility, Accountability, Consultation, and Informed roles for project stakeholders
staffing management plan
a document that describes when and how people will be added to and taken off a project team
What do organizations need if they want to be successful at implementing information technology projects?
They need to understand the importance of project human resource management and take actions to make effective use of people.
Human resource management includes the following four processes:
1. Developing the human resource plan
2. Acquiring the project team
3. Developing the project team
4. Managing the project team
McGregor’s Theory X
People who believe in this assume that workers dislike and avoid work if possible, so managers must use coercion, threats, and various control schemes to get workers to make adequate efforts to meet objectives.
McGregor’s Theory Y
Manager’s who believe in this assume that individuals do not inherently dislike work, but consider it as natural as rest or play.
Ouchi’s Theory Z
Manager’s who believe in this assume workers can be trusted to do their jobs to their utmost ability, as long as management can be trusted to support them and look out for their well-being.
5 types of power
• Coercive Power
• Legitimate Power
• Expert Power
• Reward Power
• Referent Power
The human resource plan often includes:
An organizational chart for the project, detailed information on roles and responsibilities, and a staffing management plan.
Training that is given right before it is needed, so that it is fresh in the worker’s mind when work begins.
What determines the success and failure of organizations and projects?
A technique where you repeatedly ask the question “Why?” (five is a good rule of thumb) to help peel away the layers of symptoms that can lead to the root cause of a problem.
Decisions that determine if the products or services produced as art of the project will be accepted or rejected.
The cost of evaluating processes and their outputs to ensure that a project is error-free or within an acceptable error range
A technique used to generate ideas for quality improvements by comparing specific project practices
Capability Maturity Model Integration (CMMI)
A process improvement approach that provides organizations with the essential elements of effective processes
Diagram that traces complaints about quality problems back to the responsible production operations to help find the root cause. Also known as fishbone diagram or Ishikawa diagram.
Delivering products that meet requirements and fitness for use
Conformance to requirements
The project processes and products meet written specifications
A graphic display of data that illustrates the results of a process over time
Cost of nonconformance
Taking responsibility for failures or not meeting quality expectations
Cost of quality
The cost of conformance plus the cost of nonconformance
Any instance where the product or service fails to meet customer requirements
DMAIC (Define, Measure, Analyze, Improve, Control)
A systematic, closed-loop process for continued improvement that is scientific and fact based.
Design of experiments
A quality technique that helps identify which variables have the most influence on the overall outcome of a process
External failure cost
A cost related to all errors not detected and corrected before delivery to the customer
The special characteristics that appeal to users
Diagram that traces complaints about quality problems back to the responsible production operations to help find the root cause. Also known as cause-and-effect diagram or Ishikawa diagram
Graphic display of the logic and flow of processes that helps you analyze how problems occur and how processes can be improved
Fitness for use
A product can be used as it was intended
The degree to which a system performs its intended function
A bar graph of a distribution of variables
Testing that occurs between unit and system testing to test functionality grouped components to ensure a subset(s) of the entire system works together
Internal failure cost
A cost incurred to correct an identified defect before the customer receives the product
Diagram that traces complaints about quality problems back to the responsible production operations to help find the root cause. Also known as cause-and-effect diagram or fishbone diagram
A quality system standard developed by the International Organization for Standardization (ISO) that includes a three-part, continuous cycle of planning, controlling, and documenting quality in an organization
The ease of performing maintenance on a product
Malcolm Baldrige National Quality Award
An award started in 1987 to recognize companies that have achieved a level of world-class competition through quality management
A framework for helping organizations improve their processes and systems
The average value of a population
Measurement and test equipment costs
The capital cost of equipment used to perform prevention and appraisal activities
A standard of measurement
A bell-shaped curve that is symmetrical about the mean of the population
Identifying the vital few contributors that account for most quality problems in a system
Histogram that helps identify and prioritize problem areas
How well a product or service performs the customer’s intended use
The cost of planning and executing a project so that it is error-free or within an acceptable error range
Adjustments made to correct or prevent further quality problems based on quality control measurements
Project quality management
Ensuring that a project will satisfy the needs for which it was undertaken
The totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs or the degree to which a set of inherent characteristics fulfill requirements
Periodically evaluating overall project performance to ensure that the project will satisfy the relevant quality standards
Structured review of specific quality management activities that helps identify lessons learned and can improve performance on current or future projects
Groups of nonsupervisors and work leaders in a single company department who volunteer to conduct group studies on how to improve the effectiveness of work in their department
Monitoring specific project results to ensure that they comply with the relevant quality standards and identifying ways to improve overall quality
Identifying which quality standards are relevant to the project and how to satisfy them
The ability of a product or service to perform as expected under normal conditions
Action taken to bring rejected items into compliance with product requirements or specifications or other stakeholder expectations
Robust Design Methods
Methods that focus on eliminating defects by substituting scientific inquiry for trial-and-error methods
Chart that displays the history and pattern of variation of a process over time
Diagram that helps to show if there is a relationship between two variables; also called XY charts
Seven run rule
If seven data points in a row on a quality control chart are all below the mean, above the mean, or are all increasing or decreasing, then the process needs to be examined for nonrandom problems
Six 9s of quality
A measure of quality control equal to 1 fault in 1 million opportunities
A comprehensive and flexible system for achieving, sustaining, and maximizing business success that is uniquely driven by close understanding of customer needs, disciplined use of facts, data, statistical analysis, and diligent attention to managing, improving, and reinventing business processes
Anything that must be changed before delivery of the program
Software Quality Function Deployment (SQFD) model
A maturity model that focuses on defining user requirements and planning software projects
A measure of how much variation exists in a distribution of data
Choosing part of a population of interest for inspection
The screens and reports the system generates
Testing the entire system as one entity to ensure that it is working properly
A test of each individual component (often a program) to ensure that it is as defect-free as possible
User acceptance testing
An independent test performed by end users prior to accepting the delivered system
The number of units handled correctly through the development process
What is the purpose of project quality management?
to ensure that the project will satisfy the needs for which it was undertaken.
Who decides if quality is acceptable?
3 main processes involved in project quality management
1 – quality planning
2 – quality assurance
3 – quality control
Important scope aspects of IT projects that affect quality
Functionality and Features – important to recognize the difference between necessary and optional functionality and features.
System outputs – important to define clearly what the screens and reports look like. Can the users easily interpret these outputs?
Main outcomes of quality control
7 basic tools of quality
1 – cause-and-effect diagrams
2 – control charts
3 – run chart
4 – scatter diagram
5 – histograms
6 – Pareto charts
7 – flow charts
It involves testing beyond normal operational capacity, often to a breaking point, in order to observe the results.
What can assist in improving quality?
Strong leadership, understanding the cost of quality, providing a good workplace to enhance quality, and working toward improving the organization’s overall maturity level in software development and project management can all assist in improving quality.