MODELS APPLIED ACROSS PERFORMANCE DOMAINS

Different models are more likely to be useful in different project performance domains. While the needs of the project, stakeholders, and organizational environment will determine which models are most applicable for a specific project, there are some performance domains that are more likely to make use of each model. Table 4-1 suggests the performance domain(s) where each model is most likely to be of use; however, the project manager and project team have the ultimate responsibility for selecting the right models for their project.

Table 4-1. Mapping of Models Likely to Be Used in Each Performance Domain

4.4 COMMONLY USED METHODS

A method is a means for achieving an outcome, output, result, or project deliverable. The methods described here are a sampling of those commonly used to support project work. There are many methods that are not described here, either because they are used in project management the same way they are in other disciplines, such as interviewing, focus groups, checklists, and so forth, or because they are not frequently used across a broad spectrum of projects (i.e., the methods are industry specific).

Many of the methods are related by the purpose they serve, such as estimating or data gathering, and therefore, are presented in a group. Others are related by the type of activity involved, such as those in the meetings and analysis groups.

The content in this section is not meant to describe how a method is performed. The descriptions are presented at a high level with more detailed information available from many sources, including PMIstandards+.

4.4.1 DATA GATHERING AND ANALYSIS

Data gathering and analysis methods are used to collect, assess, and evaluate data and information to gain a deeper understanding of a situation. The outputs of data analysis may be organized and presented as one of the artifacts shown in Section 4.6.6. The data gathering and analysis methods described here, coupled with the artifacts described in Section 4.6.6, are often used to inform decisions.

• Alternatives analysis. Alternatives analysis is used to evaluate identified options in order to select the options or approaches to perform the work of the project.
• Assumption and constraint analysis. An assumption is a factor that is considered to be true, real, or certain, without proof or demonstration. A constraint is a limiting factor that affects the execution of a project, program, portfolio, or process. This form of analysis ensures that assumptions and constraints are integrated into the project plans and documents, and that there is consistency among them.
• Benchmarking. Benchmarking is the comparison of actual or planned products, processes, and practices to those of comparable organizations, which identifies best practices, generates ideas for improvement, and provides a basis for measuring performance.
• Business justification analysis methods. This group of analysis methods is associated with authorizing or justifying a project or a decision. The outcomes of the following analyses are often used in a business case that justifies undertaking a project:Payback period. The payback period is the time needed to recover an investment, usually in months or years.Internal rate of return (IRR). The internal rate of return is the projected annual yield of a project investment, incorporating both initial and ongoing costs into an estimated percentage growth rate a given project is expected to have.Return on investment (ROI). Return on investment is the percent return on an initial investment, calculated by taking the projected average of all net benefits and dividing them by the initial cost.Net present value (NPV). Net present value is the future value of expected benefits, expressed in the value those benefits have at the time of investment. NPV considers current and future costs and benefits and inflation.Cost-benefit analysis. A cost-benefit analysis is a financial analysis tool used to determine the benefits provided by a project against its costs.
• Check sheet. A check sheet is a tally sheet that can be used as a checklist when gathering data. Check sheets can be used to collect and segregate data into categories. Check sheets can also be used to create histograms and matrices as described in Section 4.6.6.
• Cost of quality. The cost of quality includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraisal of the product or service for conformance to requirements, and failure to meet requirements.
• Decision tree analysis. A decision tree analysis is a diagramming and calculation method for evaluating the implications of a chain of multiple options in the presence of uncertainty. Decision trees can use the information generated from an expected monetary value analysis to populate the branches of the decision tree.
• Earned value analysis. Earned value analysis is a method that utilizes a set of measures associated with scope, schedule, and cost to determine the cost and schedule performance of a project.
• Expected monetary value (EMV). The expected monetary value is the estimated value of an outcome expressed in monetary terms. It is used to quantify the value of uncertainty, such as a risk, or compare the value of alternatives that are not necessarily equivalent. The EMV is calculated by multiplying the probability that an event will occur and the economic impact the event would have should it occur.
• Forecast. A forecast is an estimate or prediction of conditions and events in the project’s future, based on information and knowledge available at the time of the forecast. Qualitative forecasting methods use the opinions and judgments of subject matter experts. Quantitative forecasting uses models where past information is used to predict future performance. Causal or econometric forecasting, such as regression analysis, identifies variables that can have significant impact on future outcomes.
• Influence diagram. This diagram is a graphical representation of situations showing causal influences, time ordering of events, and other relationships among variables and outcomes.
• Life cycle assessment. This assessment is a tool used to evaluate the total environmental impact of a product, process, or system. It includes all aspects of producing a project deliverable, from the origin of materials used in the deliverable to its distribution and ultimate disposal.
• Make-or-buy analysis. A make-or-buy analysis is the process of gathering and organizing data about product requirements and analyzing them against available alternatives such as the purchase versus internal manufacture of the product.
• Probability and impact matrix. A probability and impact matrix is a grid for mapping the probability of occurrence of each risk and its impact on project objectives if that risk occurs.
• Process analysis. This analysis is a systematic review of the steps and procedures to perform an activity.
• Regression analysis. A regression analysis is an analytical technique where a series of input variables are examined in relation to their corresponding output results in order to develop a mathematical or statistical relationship.
• Reserve analysis. This analytical technique is used to evaluate the amount of risk on the project and the amount of schedule and budget reserve to determine whether the reserve is sufficient for the remaining risk. The reserve contributes to reducing risk to an acceptable level.
• Root cause analysis. This analytical technique is used to determine the basic underlying cause of a variance, defect, or a risk. A root cause may underlie more than one variance, defect, or risk.
• Sensitivity analysis. This analytical technique is used to determine which individual project risks or other sources of uncertainty have the most potential impact on project outcomes by correlating variations in project outcomes with variations in elements of a quantitative risk analysis model.
• Simulations. This analytical technique uses models to show the combined effect of uncertainties in order to evaluate their potential impact on objectives. A Monte Carlo simulation is a method of identifying the potential impacts of risk and uncertainty using multiple iterations of a computer model to develop a probability distribution of a range of outcomes that could result from a decision or course of action.
• Stakeholder analysis. This technique involves systematically gathering and analyzing quantitative and qualitative information about stakeholders to determine whose interests should be taken into account throughout the project.
• SWOT analysis. A SWOT analysis assesses the strengths, weaknesses, opportunities, and threats of an organization, project, or option.
• Trend analysis. A trend analysis uses mathematical models to forecast future outcomes based on historical results.
• Value stream mapping. Value stream mapping is a lean enterprise method used to document, analyze, and improve the flow of information or materials required to produce a product or service for a customer.
• Variance analysis. Variance analysis is used to determine the cause and degree of difference between the baseline and actual performance.
• What-if scenario analysis. This analytical technique evaluates scenarios in order to predict their effect on project objectives.

4.4.2 ESTIMATING

Estimating methods are used to develop an approximation of work, time, or cost on a project.

• Affinity grouping. Affinity grouping involves classifying items into similar categories or collections on the basis of their likeness. Common affinity groupings include T-shirt sizing and Fibonacci numbers.
• Analogous estimating. Analogous estimating assesses the duration or cost of an activity or a project using historical data from a similar activity or project.
• Function point. A function point is an estimate of the amount of business functionality in an information system. Function points are used to calculate a functional size measurement (FSM) of a software system.
• Multipoint estimating. Multipoint estimating assesses cost or duration by applying an average or weighted average of optimistic, pessimistic, and most likely estimates when there is uncertainty with the individual activity estimates.
• Parametric estimating. Parametric estimating uses an algorithm to calculate cost or duration based on historical data and project parameters.
• Relative estimating. Relative estimating is used to create estimates that are derived from performing a comparison against a similar body of work, taking effort, complexity, and uncertainty into consideration. Relative estimating is not necessarily based on absolute units of cost or time. Story points are a common unitless measure used in relative estimating.
• Single-point estimating. Single-point estimating involves using data to calculate a single value that reflects a best-guess estimate. A single-point estimate is opposed to a range estimate, which includes the best- and worst-case scenario.
• Story point estimating. Story point estimating involves project team members assigning abstract, but relative, points of effort required to implement a user story. It tells the project team about the difficulty of the story considering the complexity, risks, and effort involved.
• Wideband Delphi. Wideband Delphi is a variation of the Delphi estimating method where subject matter experts complete multiple rounds of producing estimates individually, with a project team discussion after each round, until a consensus is achieved. For Wideband Delphi, those who created the highest and lowest estimates explain their rationale, following which everyone reestimates. The process repeats until convergence is achieved. Planning poker is a variation of Wideband Delphi.

4.4.3 MEETINGS AND EVENTS

Meetings are an important means for engaging the project team and other stakeholders. They are a primary means of communication throughout the project.

• Backlog refinement. At a backlog refinement meeting, the backlog is progressively elaborated and (re)prioritized to identify the work that can be accomplished in an upcoming iteration.
• Bidder conference. Meetings with prospective sellers prior to the preparation of a bid or proposal to ensure all prospective vendors have a clear and common understanding of the procurement. This meeting may also be known as contractor conferences, vendor conferences, or pre-bid conferences.
• Change control board. A change control board meeting includes the group of people who are accountable for reviewing, evaluating, approving, delaying, or rejecting changes to the project. The decisions made at this meeting are recorded and communicated to the appropriate stakeholders. This meeting may also be referred to as a change control meeting.
• Daily standup. A standup is a brief collaboration meeting during which the project team reviews its progress from the previous day, declares intentions for the current day, and highlights any obstacles encountered or anticipated. This meeting may also be referred to as a daily scrum.
• Iteration planning. An iteration planning meeting is used to clarify the details of the backlog items, acceptance criteria, and work effort required to meet an upcoming iteration commitment. This meeting may also be referred to as a sprint planning meeting.
• Iteration review. An iteration review is held at the end of an iteration to demonstrate the work that was accomplished during the iteration. This meeting may also be referred to as a sprint review.
• Kickoff. A kickoff meeting is a gathering of project team members and other key stakeholders at the outset of a project to formally set expectations, gain a common understanding, and commence work. It establishes the start of a project, phase, or iteration.
• Lessons learned meeting. A lessons learned meeting is used to identify and share the knowledge gained during a project, phase, or iteration with a focus on improving project team performance. This meeting can address situations that could have been handled better in addition to good practices and situations that produced very favorable outcomes.
• Planning meeting. A planning meeting is used to create, elaborate, or review a plan or plans and secure commitment for the plan(s).
• Project closeout. A project closeout meeting is used to obtain final acceptance of the delivered scope from the sponsor, product owner, or client. This meeting indicates that the product delivery is complete.
• Project review. A project review meeting is an event at the end of a phase or a project to assess the status, evaluate the value delivered, and determine if the project is ready to move to the next phase, or transition to operations.
• Release planning. Release planning meetings identify a high-level plan for releasing or transitioning a product, deliverable, or increment of value.
• Retrospective. A retrospective is a regularly occurring workshop in which participants explore their work and results in order to improve both process and product. Retrospectives are a form of lessons learned meeting.
• Risk review. A meeting to analyze the status of existing risks and identify new risks. This includes determining if the risk is still active and if there have been changes to the risk attributes (such as probability, impact, urgency, etc.). Risk responses are evaluated to determine if they are effective or should be updated. New risks may be identified and analyzed and risks that are no longer active may be closed. Risk reassessment is an example of a risk-review meeting.
• Status meeting. A status meeting is a regularly scheduled event to exchange and analyze information about the current progress of the project and its performance.
• Steering committee. A meeting where senior stakeholders provide direction and support to the project team and make decisions outside of the project team’s authority.

4.4.4 OTHER METHODS

The methods described in this section don’t fit into a specific category; however, they are common methods that are used for a variety of purposes on projects.

• Impact mapping. Impact mapping is a strategic planning method that serves as a visual roadmap for the organization during product development.
• Modeling. Modeling is the process of creating simplified representations of systems, solutions, or deliverables such as prototypes, diagrams, or storyboards. Modeling can facilitate further analysis by identifying gaps in information, areas of miscommunication, or additional requirements.
• Net Promoter Score (NPS®). An index that measures the willingness of customers to recommend an organization’s products or services to others. The score is used as a proxy for gauging the customer’s overall satisfaction with an organization’s product or service and the customer’s loyalty to the brand.
• Prioritization schema. Prioritization schema are methods used to prioritize portfolio, program, or project components, as well as requirements, risks, features, or other product information. Examples include a multicriteria weighted analysis and the MoSCoW (must have, should have, could have, and won’t have) method.
• Timebox. A timebox is a short, fixed period of time in which work is to be completed, such as 1 week, 2 weeks, or 1 month.