Glossary
Acceptance A risk management strategy that requires no action unless the risk actually occurs.
Analogous estimating The process of developing an estimate for a project by using the real data from a comparable, similar project.
Assumptions For planning purposes, assumptions are factors considered to be true, real, or certain, without actual proof or demonstration. For example, it could be assumed that organizational priorities will not shift in the next six months, or that the work is technically feasible even though it has not been done before. Assumptions are often necessary, but carry risk.
Authority The right to make decisions, spend funds, allocate resources, or approve choices. A person’s authority can be defined on three levels: things they can do that require no permission, things they can do with permission, and things that someone else must do.
Avoidance A risk management strategy that involves changing the project so the risk event cannot occur or the project is protected from its consequences.
Backward pass A technique to calculate the late finish and late start for each task. The backward pass reveals the critical path and available float.
Baseline The approved project plan, plus or minus approved changes. Use the baseline to compare actual to planned results so you can determine if the project is on track.
Buffer In Critical Chain Project Management, an amount of project reserve, time (and sometimes resources) set aside to absorb the expected uncertainty in project tasks. There are two types of time buffers: the project buffer and feeder buffers.
Business risk A type of risk that combines threat and opportunity in the same situation or action. A new product, for example, could potentially be a big market hit and make a lot of money (opportunity), or it could fail to achieve wide acceptance and lose money (threat). Contrast with pure risk.
Change control The process of identifying, documenting, approving (rejecting), and controlling changes to the baseline. If change is not managed and controlled, the result is scope creep.
Closeout The formal process of bringing a project to an end.
Constraint A restriction, limitation, or barrier that limits a manager’s choices and actions. The cost constraint (how much can I spend?), the time constraint (how long do I have?), and the performance criteria (how good is “good enough”?) form the Triple Constraints.
Contingency A risk management strategy that involves a plan to be triggered if the risk occurs or appears likely.
Contingency allowance Extra time or money budgeted in the event of expected problems.
Control account In a Work Breakdown Structure (WBS), a control account groups together one or more work packages.
Cost estimating A process for determining the likely or potential cost associated with a project or work package.
Cost Performance Index (CPI) In Earned Value Project Management, the cost performance index (CPI) measures the ratio of actual cost (AC) to the earned value (EV) of the project at a given point in time: CPI = AC / EV.
Cost Variance (CV) In Earned Value Project Management, cost variance (CV) is the difference between the actual cost (AC) and the earned value (EV) of the project at a given point in time: CV = AC – EV.
Crash In the Critical Path Method (CPM), crashing is the act of speeding up the completion time for one or more work packages by adding resources (money, people, equipment).
Critical Chain Project Management An alternative to conventional project management thinking, with particular application to multiple project management. The Critical Chain method considers resource dependencies along with precedence dependencies. Therefore, the Critical Chain—unlike the critical path—can cut across project lines. Critical Chain Project Management uses buffers to control inherent project uncertainty.
Critical path The sequence of project activities that determines the duration of the project; the longest path is defined by means of a project network diagram
Critical path method (CPM) A technique to use the critical path to optimize cost and schedule, developed in the late 1950s by DuPont Corporation and Remington Rand.
Decision tree analysis A common management technique used to compare the financial outcomes of different decisions, illustrated in Exhibit 8-4.
Deliverable A product, service, or result that must be produced to complete a process, phase, or project. An external deliverable is normally provided to a customer; internal deliverables are necessary for later steps in the same project to occur.
Dependency relationships The relationship between a predecessor task or work package and a dependent task or work package can take the following forms: finish-to-start (FS) dependency, finish-to-finish (FF) dependency, start-to-start (SS) dependency, and in rare cases, start-to-finish (SF) dependency.
Dependent task or work package A task or work package that cannot start until some other work package has started or finished. See also dependency relationships; compare with predecessor task or work package.
Downside risk See threat.
Duration The amount of time an activity or project takes, measured in work periods (not counting weekends, holidays, or other nonworking time). Compare to effort.
Earned Value Project Management An advanced tool for comparing schedule and cost performance to plan. Considered an exceptionally valuable tool for identifying troubled projects early.
Effort The number of person-hours devoted to a specific task or work package. Compare to duration.
Enhancement A risk management strategy designed to improve the probability or impact of using a positive opportunity.
Exploitation A risk management strategy that uses an opportunity to improve the project’s timeliness, cost, or quality.
Feeder buffer In Critical Chain Project Management, a feeder buffer is a kind of project reserve, time (or even resources) that are set aside to absorb the expected uncertainty in the duration of work packages on noncritical paths in the project.
Filtering A process of analyzing risks by applying a series of questions, such as these: is the risk significant, is it probable, must we act quickly? Once the risks have been filtered into different categories, it’s often easier to act on them intelligently.
Finish-to-finish (FF) dependency A dependency relationship in which the dependent task cannot finish until the predecessor task has been completed.
Finish-to-start (FS) dependency A dependency relationship in which the dependent task cannot begin until the predecessor task has been completed. In project management, this is often considered the default relationship type.
Firefighting A reactive form of multiple project management in which projects start as the result of emergencies or system/product failures.
Float Extra time in the schedule to accomplish certain tasks before the accumulated lateness threatens the expected project completion date. Free float is extra time before the next task begins, whether the subsequent task is on the critical path or not.
Forward pass A technique to calculate the early start and early finish for each task. The forward pass reveals the expected duration of the project.
Gantt chart A bar graph drawn over a calendar grid, showing when specific tasks will be accomplished in the schedule.
Hierarchy of constraints The order of driver, middle constraint, and weak constraint that represents the priorities for achieving the Triple Constraints on your project.
Independent program A program of separate projects. The outcomes of the projects are specific (delivered to a specific customer, for example), and usually the failure of one project doesn’t compromise others. Their connection is shared resources. This is a type of multiple project collection.
Independent project A project in an independent program.
Initiation The process of starting a project.
Insurable risk Another term for pure risk, because insurance is a commonly employed strategy for dealing with pure risks.
Intact work team A project team that is primarily or exclusively devoted to a single project or phase, and a team that stays together for the majority of the project life cycle.
Interdependent project A project with outcomes that connect to make one large whole. A very large project is sometimes called a program because its elements are large enough to be major projects in their own right. Projects in an interdependent program form a type of multiple project collection.
Kanban task management A technique for using task information sheets or WBS dictionary entries to control work on single and multiple projects.
Lag An amount of time added to a dependency relationship. Example: Task B cannot begin until two weeks after Task A has been completed.
Lead An amount of time subtracted from a dependency relationship, causing the two work packages to overlap. Example: Task B must begin two weeks before the scheduled finish of Task A.
Least-resource scheduling A technique for allocating resources among multiple projects.
Lessons learned The process of evaluating a project’s performance for future improvement.
Milestone A significant event in a project life cycle.
Mitigation A risk management strategy that involves lowering the risk’s likelihood or impact.
Network diagram A flow chart picture that shows interdependencies and connections of the project work tasks.
Ongoing work effort See operations.
Operations Ongoing work efforts without a planned or intended ending. Operations work is generally repetitive, and follows an organization’s existing procedures.
Opportunity A positive risk event, also known as upside risk.
Parametric estimating An estimating technique that uses a statistical relationship between historical data and other variables (for example, square footage in construction, lines of code in software development) to prepare an estimate.
PERT analysis A three-point estimating technique to manage uncertainty in projects.
Portfolio A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. The projects and programs in a portfolio are not necessarily independent or directly related.
Portfolio management The centralized management of one or more portfolios, including identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work to achieve specific strategic business objectives. It focuses on ensuring that projects and programs are reviewed to prioritize resource allocation, and that the management of the portfolio is consistent with and aligned to organizational strategies.
Predecessor task or work package A task or work package that must be started or finished before some other work package can start. See also dependency relationships; compare with dependent task or work package.
Priority-setting algorithms A set of seven tools that can be used to prioritize activities among multiple projects.
Program A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Projects within a program are usually related by a common outcome or collective capability.
Program management The centralized coordinated management of a program to achieve its strategic objectives and benefits. Program management focuses on project interdependencies to determine the optimal approach for managing them.
Progressive elaboration In project management, the idea that the way to develop a detailed plan is to start with what you know, then refine as you learn more.
Project A temporary endeavor undertaken to create a unique product, service, or result. By definition, projects have a definite beginning and end.
Project buffer In Critical Chain Project Management, the project buffer is a buffer of extra time before the final deadline, which can absorb the expected uncertainty in the duration of work packages along the critical path.
Project charter The document that brings a project into existence, whether it’s a memo, an email, or a contract. It doesn’t matter if the project charter is given a formal label or not.
Project life cycle The stages of a given project. May be general or specific to the needs of the project.
Project management The application of knowledge, skills, tools, and techniques to project activities, in order to meet the project requirements.
Project plan A comprehensive project plan that contains the overall approach the project manager and team will take toward the work of the project. A plan normally includes a schedule, a budget, a list of requirements or goals, an assessment and response to project risks, a plan for reporting and communication, and other elements as necessary. A project plan can be a formal, comprehensive document or it can be informal and sketchy. What’s important is that the plan be proportional to the complexity, difficulty, and importance of the project.
Pure risk A risk that contains the possibility of a bad outcome (threat), which, if it doesn’t occur, carries no advantage other than avoiding the harm. If you have an accident, you are worse off. If you don’t have an accident, your life goes on normally. Contrast with business risk.
Requirements management The process of identifying requirements, documenting them, analyzing them, ensuring that they are integrated into the product or service, controlling changes, and verifying that the requirements have been fulfilled.
Residual risk Residual risk is the amount of risk left over after your risk response has been applied. If you have a potential loss of $100,000, and you buy an insurance policy with a deductible of $1,000 to cover the loss if it happens, your residual risk is $1,000 — what you would still have to pay yourself. If there is a 10% chance of losing $100,000 (risk score = 0.1 × $100,000 = $10,000), and you are able to cut the probability in half, your residual risk is $5,000, the risk score of the remaining risk. (See also secondary risk.)
Resource Assignment Matrix (RAM) A tool to ensure all project roles are identified and assigned.
Resource leveling The process of adjusting schedule and resources to ensure project work can be accomplished.
Resource loading The process of determining what resources are required to accomplish project work in a given time period.
Resource scheduling The process of assigning specific resources to specific work packages.
Risk The measurement of uncertainty on a project is known as risk. Risk consists of threats (negative risk events) and opportunities (positive risk events). A risk is measured by the formula R = P × I: the value of a risk is the probability of the risk event happening times the impact of the event if it happens. A 10% chance of an accident that would cost $10,000 if it happened has a risk value of $1,000, which should be compared to the cost of mitigating or avoiding the risk in question.
Risk management The process of identifying, analyzing, responding to, and managing threats and opportunities.
Risk matrix A grid that shows different levels of probability on one axis and different levels of impact on the other. By cross-referencing the two, risks can be sorted into “buckets” of low, medium, and high risks, illustrated in Exhibit 8-5.
Risk tolerance The threshold values for different categories of risk. Risks above the threshold level in a given category (for example, financial, safety, customer satisfaction, or legal) are ones the organization chooses not to accept.
Schedule compression The process of applying management techniques to reduce total project time.
Schedule Performance Index (SPI) In Earned Value Project Management, the schedule performance index (SPI) measures the ratio of planned value (PV) to the earned value (EV) of the project at a given point in time: SPI = PV / EV.
Schedule Variance (SV) In Earned Value Project Management, schedule variance (SV) is the difference between the planned value (PV) and the earned value (EV) of the project at a given point in time: SV = PV – EV.
Scope creep Uncontrolled and unmanaged growth of project scope over time. Recognizing and avoiding scope creep are important project management goals.
Secondary risk A new risk that arises from your strategy to deal with the original risk. If you buy an expensive new piece of equipment to solve a quality control risk on your existing product line, you may solve the original risk altogether, but you now take on any new risks associated with the new equipment: training, materials, repairs and maintenance, operator error, safety, and so forth. Secondary risk may be acceptable; if it is not, it may be something you can mitigate. Sometimes, secondary risk is so high you should consider a different course of action. (See also residual risk.)
Sharing A risk management strategy that involves transferring the value of an opportunity elsewhere.
Spend plan The accumulated, planned expenditures of your project over time.
Stakeholder A person or group with a direct or indirect stake in the project or the project’s outcome.
Start-to-finish (SF) dependency A dependency relationship in which the dependent task cannot finish until the predecessor task has been started. Rarely used in practice.
Start-to-start (SS) dependency A dependency relationship in which the dependent task cannot start until the predecessor task has been started.
Statement of work A short, narrative summary of the project and the work to be accomplished.
Task information sheet A form to organize information about a given task or work package in a project. When linked directly to the Work Breakdown Structure, also known as a WBS Dictionary.
Threat A negative risk event, also known as downside risk.
Tracking Gantt chart A Gantt chart that compares the planned schedule to actual performance.
Tradeoffs Choices among different priorities. A project may take longer or cost more if a higher performance target is set. Tradeoffs can be made within a project or among multiple projects (more for Project A means less for Project B).
Transfer A risk management strategy that involves moving the ownership of the risk to some other entity.
Triple Constraints The three common boundaries of all projects: the time constraint, the cost (resources) constraint, and the performance standard.
Upside risk See opportunity.
WBS See Work Breakdown Structure (WBS).
WBS dictionary A form or template for each WBS component that briefly defines the scope or statement of the work, defines deliverables, contains a list of associated activities, and provides a list of recognized milestones to gauge progress. (See also Task Information Sheet.)
Work The combination of projects and operations that make up your area of responsibility.
Work Breakdown Structure (WBS) A graphical or outline representation of all the work packages in a specific project, or all the projects in a program.
Work package A discrete element of a project that can be assigned to an individual or a small team. The Work Breakdown Structure (WBS) decomposes the project into work packages.