▪ Manage Compliance Requirements

▪ Evaluate and Deliver Project Benefits

and Value

Keeping the Business in ▪ Evaluate and Address Internal and

External Business Environment Change
Mind ▪ Support Organizational Change
▪ Employ Continuous Improvement

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 Manage
Compliance
Requirements
Domain: Business Environment
ECO: Task#1

Enablers:
➢ Set a clear vision and mission
➢ Confirm project compliance requirements (e.g.,
security, health and safety, regulatory compliance)
➢ Classify compliance categories
➢ Determine potential threats to compliance
➢ Use methods to support compliance
➢ Analyze the consequences of noncompliance
➢ Determine necessary approach and action to address
compliance needs (e.g., risk, legal)
➢ Measure the extent to which the project is in
compliance

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Manage Compliance Requirements
❑ Compliance means the conformance to political ❑ In prioritization, compliance is a must-have
(laws, rules, regulations), business, and industry requirement
requirements for the product or service
❑ Most of the compliance requirements include:
❑ Compliance requirements are non-negotiable ➢ Legal
aspects of the project
➢ Regulatory

❑ The project manager needs to understand ➢ Specific practice

compliance requirements and ensure the project ➢ Privacy laws
is delivering benefits and value
➢ Handling sensitive information
❑ The team is responsible to identify, track and
❑ Check the Risk Register to check compliance-
manage compliance requirements throughout
related risk
the project
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Compliance Categories

❑ Compliance categories will vary depending on

the project and business context

Workplace health and safety

Quality

Environmental

Security and privacy

Anticorruption

Social Responsibility

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Compliance & Quality Management

❑ The deliverables produced by the project team ❑ Any compliance that is not within the tolerance
should undergo a Quality Control process to of the project manager, should be escalated to
validate whether it meets functional and non- the next level
functional requirements, including compliance
requirements

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Quality Audit & Inspection

❑ Quality audits are conducted to verify ❑ Sampling technique can be applied to ensure the
compliance with organizational policies, quality and compliance
processes, and procedures

❑ Quality audits are conducted by a team external Transfer

Verified
Deliverable to
Deliverable
to the project such as an internal audit team or •Executing •Validate
Operation
Scope
•Quality •Close Project
PMO Control or Phase

Accepted
Deliverable
Deliverable
❑ Reports and recommendations after the audit
can reduce the cost of quality of product and
service and increase project acceptance by the
customer

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Confirm Compliance

❑ Confirm compliance means executing the

Execute
quality management plan using tolerance, QA Quality
management
tools, and audits plan

❑ If the product or service is not in conformance Confirm

compliance or
with compliance, actions to be taken or escalate Use tolerance
take action or
escalate

Apply Quality
Perform
Assurance
Quality audit
tools

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 Evaluate and
Deliver Project
Benefits and Value
Domain: Business Environment
ECO: Task#2

Enablers:
➢ Investigate that benefits are identified
➢ Document agreement on ownership for ongoing
benefit realization
➢ Verify measurement system is in place to track
benefits
➢ Evaluate delivery options to demonstrate value
➢ Appraise stakeholders of value gain progress

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Deliver Project Benefits & Value

❑ The project manager is responsible to meet the ❑ Business value includes:

objectives and requirements of stakeholders by ➢ Customer value
delivering the right product or service
➢ Shareholder value

❑ Business value means the net quantifiable ➢ Revenue

benefits from a project or service which may be ➢ Business partner value
tangible or intangible or both
➢ Employee knowledge
❑ In Agile and hybrid projects, delivering value ➢ Organizational intellectual property value
often and as early as possible through
incremental delivery approach

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Benefits & Value - Example

Output: Benefits & Value:

Buildings Shareholders
Equipment Staff
Staffing Patients
Process Hospital Neighbors

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Benefits Management Plan

❑ Benefit management plan is a document that ❑ Benefit management plan includes:

describes how and when the benefits of a project ➢ Target benefits
will be derived and measured
➢ Benefits owner

❑ It is a part of the business document, not part of ➢ Strategic alignment

the project management plan, and will be ➢ Timeframe
prepared before the project is initiated
➢ Metrics

➢ Risk

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Benefits Realization

❑ In an agile project sprint reviews/demo is ❑ The concept of the minimum viable product
conducted at the end of each iteration/sprint to (MVP) and minimum business increment (MBI)
check user stories are completed, get feedback, can be used to realize the benefit
and any changes to be done to optimize the
❑ In the traditional project release occurs at the
business value
end of the project,
❑ In an agile project, releases management help to
realize the business value

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Benefit-Cost Analysis (BCA)

❑ Benefit cost analysis is used to measure or ❑ Cash outflow is the money that’s being
evaluate project benefits and value distributed by business.

❑ Cash inflow is the amount of cash coming into

the business

R- Revenue
OPEX – Operating cost
CAPEX – Capital cost
TAXES – Taxes and royalties paid

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Return on Investment (ROI)

❑ The return on investment is a financial measure of ❑ Example: An investor invested in a project, which
the gain (or loss) from an investment compared to is valued at $50,000. Two years later, the investor
the amount of money invested received $100,000 from the project. Calculate the
ROI.
❑ ROI = Profit / Cost x 100
100,000 −50,000
❑ Profit = Revenue – Cost ROI = 100,000

50,000
= 100,000

= 0.5 x 100% = 50%

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Present Value (PV)

❑ Present value is the current value of a future ❑ Example: Find the PV of a sum of $50,000 due
amount of money. after 5 years with an interest rate of 7%.
50,000
PV = 1+0.07 5

= $35,649

PV- Present value Choice of receiving $35,649 today or $50,000

FV - Future value in 5 years; opt for $36,000 if OK with the

r- Interest value inflation rate of 7%

n- Number of years

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Net Present Value (NPV)

❑ Net present value (NPV) is the difference ❑ Example: A machine cost $50,000, it will produce
between the PV of cash inflow and PV of cash cash inflows of $25,000 in 1st year, $20,000 in
outflow over a period of time 2nd year, and $10,000 in 3rd year. If 12% is the
required rate of return, what is NPV? Should
❑ It is a fundamental concept in capital budgeting
purchase this machine?
and investment planning to analyze the
25,000 20,000 10,000
profitability of projected investment NPV = ( + + ) – 50,000
1+0.12 1 1+0.12 2 1+0.12 3

NPV = PV of cash inflow – PV of cash outflow = 45,383.11 – 50,000 = - 4616.89

Because NPV is a negative value, should not

purchase this machine.

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Internal Rate of Return (IRR)

❑ Internal rate of return (IRR) is the interest rate at Example: If project A has an IRR of 18% and project
which the PV of cash inflows is equal to the PV of B has an IRR of 22% then we can invest in project B
cash outflows

❑ IRR means the interest rate that would be

required to apply to the NPV formula to make
the payback period the end of your project.

IRR means, PV of cash inflow = PV of cash outflow

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Remember!

➢ Return on investment (ROI) – Higher ROI is a

better

➢ Net present value (NPV)- It is the most common

project selection method – Higher NPV is better

➢ Internal rate of return (IRR)- Higher IRR is better

➢ Payback period (PBP) – Lower PBP is a better

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Net Promoter Score (NPS)

❑Net Promoter Score (NPS) is a measure of a Stakeholder 3 = “8”

Stakeholder 4 = “10”
customer’s willingness to recommend a product or
-----------------------------------------
service to a friend or colleague
Promoters = 2
Passives = 1
❑The scoring for this answer is 0-10 scale
Detractors = 1
➢Promoters: 9-10 NPS Score = % of Promoters - % of Detractors
➢Passives: 7-8 NPS = (2 out of 4 is 50% - 1 out of 4 is 25%)
➢Detractors: 0-6 NPS = 50% - 25% = 25%
---------------------------------------------
❑NPS Score = % of promoters - % of detractors
Use customers to rate their experience with a
number from -100 (all respondents are detractors)
❑Example: For a product, receive the following score
to +100 (all respondents are promoters). A higher
Stakeholder 1 = “5” score is desirable.
Stakeholder 2 = “9” In our case, the score is taken as 25

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A/B Testing

❑ A/B testing is a way of comparing two design

choices.

❑ Example: A design with a red button, and another Design with red Design with green
button button
design green button. Then, present one sample of
a randomized audience with a blue button and
the other sample with a green button. Whichever Click rate= 60% Click rate= 80%
design gets the most clicks will be the successful
design.

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Simulation

❑ Simulation is an analysis technique where a

computer model is used to run various data
several times to predict the probability of events

➢ Example: Monte Carlo

❑ Monte Carlo is a modern statistical analysis

technique to provides a range of possible
estimates with probability (confidence level) for
scheduling activities and estimating project cost.

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Expected Monetary Value (EMV)

❑ Expected monetary value (EMV) is a technique of ❑ Example- If calculated for the delay in delivery
calculating the average outcome in an uncertain cost of $6,000, the probability of delay is 80%.
future based on probability and estimated value EMV = Probability of delay X Impact in money
value
❑ EMV = Probability X Impact in money value
EMV = 80% X -6,000 =- 4,800
❑ In EMV calculations, opportunities have positive
value and threats have negative value

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Decision Tree Analysis

❑ Decision tree analysis (DTA) is a tree-like model

technique used to determine which is the best
project option and decision among many by
calculating the expected monetary value (EMV)

❑ Decision tree analysis can be used for:

➢ Make or buy
➢ Build or upgrade
➢ Self-implementation or outsourcing
➢ Cast in place or precast

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Try This!

High customer use

($200M) Profit=
Build new $80M EMV?
software
EMV Total=?
($120M) Low customer use
Profit
($90M) EMV?
Decision -$30M
Build or Upgrade?
High customer use Profit
($120M) EMV?
Upgrade existing $70M
software EMV Total=?
($50M) Low customer use Profit
$10M EMV?
($60M)

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 Evaluate and Address
Internal and External
Business Environment
Changes
Domain: Business Environment
ECO: Task#3

Enablers:
➢ Survey changes to external business environment
(e.g., regulations, technology, geopolitical, market)
➢ Assess and prioritize impact on project
scope/backlog based on changes in external business
environment
➢ Recommend options for scope/backlog changes (e.g.,
schedule, cost changes)
➢ Continually review external business environment
for impacts on project scope/backlog

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Internal & External Business Environment

❑ For projects, changes come from inside of ❑ External changes can be tracked using the
organization (business) and outside of the frameworks:
organization (industry) ❑ PESTLE – Political, Economic, Social,
Technical Legal, Environmental
❑ The project manager should continuously assess
both internal and external changes ❑ TECOP – Technical, Environmental,
Commercial, Operational, Political
❑ Some of the internal changes are:
❑ VUCA – Volatility, Uncertainty, Complexity,
➢ Organizational change
Ambiguity
➢ New deliverable

➢ Reprioritization

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Steering Committee / Project Board

❑ The Steering committee (project board)is a ➢ Functions: Reviewing project charter,

decision-making body that consists of top reviewing objectives, and allocating resources
managers and decision-makers who provide,
review and monitor strategic direction and policy
guidance to a team and other stakeholders.

❑ Steering committee board members include:

➢ Project sponsor

➢ PMO staff

➢ Senior user

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 Support
Organizational
Change
Domain: Business Environment
ECO: Task#4

Enablers:
➢ Assess organizational culture
➢ Evaluate impact of organizational change to project
and determine required actions
➢ Evaluate impact of the project to the organization
and determine required actions

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Support Organizational Change

❑ Projects are influenced by various factors,

important among them are:

➢ Culture

➢ Organizational structure

➢ Strategy

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Organizational Culture

❑ An organization’s culture consists of a shared ❑ These values have a strong influence on

vision, mission, values, beliefs, regulations, employee behavior as well as organizational
policies, procedures, motivation system, risk performance
tolerance, authority, knowledge-sharing,
leadership, approach, etc.

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 Organizational Structure

❑ Organizational structure means how people

connected with each other based on their
reporting

❑ Some of the important organizational structures

are:

➢ Functional

➢ Projectized (Project-oriented)

➢ Matrix

➢ Composite

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Functional Organization

Relationship Functional

Team members Functional dept

are loyal to

Team members Functional

report to manager
Project manger’s Part-time
role is
Team member’s Part-time
role is
Control of project Low
manager over
team member is

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Projectized Organization

Relationship Projectized
Team members Project
are loyal to
Team members Project manager
report to
Project manger’s Full-time
role is
Team member’s Full-time
role is
Control of project High
manager over
team member is

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Matrix Organization

Relationship Matrix
Team members Conflicted loyalty
are loyal to
Team members Both Functional
report to manager and
Project manager
Project manger’s Full-time
role is
Team member’s Part-time
role is
Control of project Medium
manager over
team member is

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Project Management Office (PMO)

❑ Project management office (PMO) is an entity Supportive PMO

within the organization that ensures compliance ➢Low level of control over the project
with project governance, process, facilities, the ➢Provides tools, templates, methodology,
guidance, policy guidelines and support
sharing of resources, methodologies, tools, and
Controlling PMO
techniques
➢Moderate level of control over the project
❑ Different types of PMOs are supportive, ➢Provides guidance on how to manage projects.
controlling, and directive ➢They also provide training and ensure project
management approach compliance

Directive PMO
➢High level of control over projects.
➢They may provide project managers for projects
and be responsible for project success

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 Employ Continuous
Process
Improvement

PMP Certification Training. PMP logo and the related statement is a M-5.36
Continuous Process Improvement

❑ Process improvement is a methodology within ❑ An effort is required for continuous

project management that helps evaluate improvement of the product, services, and
feedback about your processes to ensure process and implemented generally by PMO
continual improvement

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Process Improvement Methods

❑ Some of the important quality and continuous to janitor level

improvement methods are: ➢ Lean Six Sigma: improve performance by
➢ Deming cycle: Plan-Do-Check-Act systematically removing waste and reducing

➢ Juran Trilogy: 3 FOLD-> Quality planning, variation

Quality control, and Quality improvement

➢ Total quality management (TQM): Producing

quality products and services to fulfill(VOC)
customer needs

➢ Kaizen: Continuous improvement from CEO

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PDCA Cycle

❑ Plan- Establish objectives and processes

required to deliver the desired results

❑ Do - Carry out the objectives from the previous

step

❑ Check - Data is compared to the expected

outcomes to see many similarities and
differences. Example: Gap analysis

❑ Act - Also called "Adjust", this act phase is where Fig. Continuous quality improvement with PDCA
a process is improved

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Continuous Improvement Tools

❑The supporting tools that can be used for promoting continuous improvement are:
➢Lessons learned register

➢Retrospective

➢Challenge status-quo

➢Experiment

➢Feedback

➢Update the organizational process assets based on the lessons learned, retrospectives, and
experiments!

PMP Certification Training. PMP logo and the related statement is a certification mark of PMI, USA
 ▪ Manage Compliance Requirements
▪ Evaluate and Deliver Project
Here is what we learned Benefits and Value
▪ Evaluate and Address Internal and
External Business Environment
Change
▪ Support Organizational Change
▪ Employ Continuous Improvement

PMP Certification Training. PMP logo and the related statement is a certification mark of PMI, USA M-5.41