Chapter 14: Quality Management

Aim: To understand the Plan Quality process

Although the project manager has overall responsibility for quality, the entire project team plays a role in quality management. Every member of the project team must understand the importance of contributions, accept ownership for problems, be committed to monitoring and improving performance, and be willing to openly discuss issues among team members. Although specific techniques and measures apply to the product being produced, the overall project quality management approach applies to any project and is relevant to the project as well as the product being produced.

Exam Watch:
Understand the difference between quality and grade. Quality is a measure of how well the characteristics match requirements. Grade is assigned based on the characteristics that a product or service might have. So a product might be of low grade, meaning it has limited features, but might still be acceptable. Low quality is never acceptable.

Also, you need to understand the difference between precision and accuracy. According to the PMBOK, “Precision means the values of repeated measurements are clustered and have little scatter. Accuracy means that the measured value is very close to the true value. Precise measurements are not necessarily accurate. A very accurate measurement is not necessarily precise.”

The Plan Quality Process:

The plan quality process has a number of key inputs, many of which originate from other initiating and planning processes. The table below shows the inputs, tools and techniques, and outputs for the plan quality process.

Plan Quality
Inputs	Tools & Techniques	Outputs
Scope baseline Stakeholder register Cost performance baseline Schedule baseline Risk register Enterprise environmental factors Organizational process assets	Cost-benefit analysis Cost of quality Control charts Benchmarking Design of experiments Statistical sampling Flowcharting Proprietary quality management methodologies Additional quality planning tools	Quality management plan Quality metrics Quality checklists Process improvement plan Project document updates

The plan quality process incorporates various quality concepts with which you should be familiar. The following list highlights important key concepts in PMI’s quality management:
• The cost of preventing mistakes is generally less than the cost of repairing them.
• In order to be successful, management support for the quality program must exist.
• Quality is tied closely to the scope-cost-time constraints; without quality these objectives cannot be met successfully.
• The cost of quality refers to the cost to implement a quality program.
• Understanding and managing customer expectations is important to a successful quality program.
• The quality program should emphasize continuous improvement.
• There is a close alignment between the quality approach and the overall project management approach on a project.

Exam Watch
PMI’s definition of quality: “The degree to which a set of inherent characteristics fulfill requirements.”

You can learn more about the Plan Quality process by Clicking Here

Prev: Chapter 13

Next: Chapter 15

Points to Remember: Project Cost Management

Analogous Estimating is sometimes called “Top-Down Estimating”. Take a minute and think about why it would be called “top-down.” When you’re doing bottomup estimating, first you break it down into pieces, estimate each piece, and add them up. Analogous estimation is the opposite: you start with the whole project (without breaking it up at all), find other projects that were like it, and use those projects to come up with a new estimate.

Cost of Quality is how much money it takes to do the project right.

Benefit cost ratio (BCR): This is the amount of money a project is going to make versus how much it will cost to build it. Generally, if the benefit is higher than the cost, the project is a good investment.

Net present value (NPV): This is the actual value at a given time of the project minus all of the costs associated with it. This includes the time it takes to build it and labor as well as materials. People calculate this number to see if it’s worth doing a project. Money you’ll get in three years isn’t worth as much to you as money you’re getting today. NPV takes the “time value” of money into consideration, so you can pick the project with the best value in today’s dollars.

Just because you plan out a budget in your Cost Performance Baseline, that doesn’t mean your project is 100% guaranteed to fall inside that budget. It’s common for a company to have a standard policy for keeping a management reserve to cover unexpected, unplanned costs. When you need to get your project funded, that funding has to cover both the budget in your Cost Performance Baseline and the management reserve.

Parametric Estimation is used in Estimate Costs and Determine Budget.

Cost Aggregation is rolling up costs from the work package level to the control account level so that the numbers can be followed down through the WBS hierarchy.

Control Accounts are highlevel WBS items that are used to track cost estimates. They do not represent activities or work packages. They represent the cost of the work packages and activities that appear under them in the WBS

The main output of Estimate Costs is the Activity Cost Estimate and the Basis of Cost Estimate. The main output of Determine Budget is the Cost Performance Baseline and Project Funding Requirements.

You will get questions on the exam asking you to select between projects using Net Present Value (NPV) or Benefit Cost Ratio (BCR). Always choose the project with the biggest NPV or BCR!

Lifecycle Costing means estimating the money it will take to support your product or service when it has been released.

Rough Order of Magnitude Estimation is estimating with very little accuracy at the beginning of a project and then refining the estimate over time. It’s got a range of –50% to +50%.

If the SPI is below 1, then your project is behind schedule. But if you see a CPI under 1, your project is over budget! SPI and CPI are just ratios! If SPI is really close to 1, then SV will be really close to zero—and it means that my project is going as planned! And when your CPI is really close to 1, it means that every dollar your sponsor’s spending on the project is earning just about a dollar in value.


Points to Remember - Other Topics:

Introduction to Projects & Project Management
Relationship Between Knowledge Areas & Process Groups
Project Integration Management
Project Scope Management
Project Time Management
Project Quality Management
Human Resource Management
Project Communication Management
Project Risk Management
Project Procurement Management
Ethics & Professional Responsibility