PMI Definitions

The terms, explanations and usage of PMI vocabulary used in PMP work and study.

I found learning, compiling online and testing myself on the following terms, definitions and usage a useful study method.  For self testing, you can keep the answer column off screen and display only the first 2 columns of the table. The answers include personal interpretation and description in my own words. So please refer to the PMBOK for clarification, additional information, or correction. Or feel free to advise me of any feedback in the form at the bottom or via email. Good luck!

Term Practice Definition
Delphi technique Gathering input separately from multiple experts, then compiling it and resending it for review to the same experts. This allows for objective submission and review of ideas.
Watchlist non-critical risks documented during qualitative risk analysis for later review (during monitoring and controlling)
Issue Log Risks that have been realized are documented here and provide a recourse to stakeholders when they cannot be handled immediately.
SWOT Strengths, Weaknesses, Opportunities, and Threats analysis of project
Business Risk
Pure risk
A venture’s gain or loss (e.g. the iPhone)
An insurable risk of a loss (e.g. fire, theft, etc.)
Scope Baseline Part of the PMP composed of: project scope statement, WBS, WBS Dictionary. Completed during Create WBS
Grade raiting given to items with same functional use (features) but different quality requirements. (a hammer rated for professional use vs. just home) Quality is how well a hammer of grade n works.
Ishikawa diagram a.k.a Fishbone diagram and cause and effect diagram. Allows a backward look at a problem/symptom to determine root cause.
Pareto Chart Histogram (bar chart) organized by results to prioritize most critical to help identify root cause
PERT Program Evaluation and Review Technique / 3 point estimate.EAD = ( P + 4M + O ) / 6
PDM / AON Precedence diagramming method (most common) a.k.a activity on node uses boxes and arrows to show relationships like Finish to Start.
GERT PDM + activity looping
ADM Arrow diagramming method uses circle nodes and records durations on the arrows. A dotted line arrow has zero duration.
Parametric Estimating
Uses historical/other parameters to plot forecasts of activity durations, cost, scope, etc. Data can be evaluated via scatter diagram or learning curve.
FPIF Fixed price incentive fee. Performance incentive is specified in contract. FPIF successive target contract allows for multiple incentive levels.
FPAF Fixed price award fee. Same as FPIF except award is set in advance.
FPEPA Fixed price economic price adjustment addresses uncertain future economic conditions. e.g. pricing could be tied to US CPI.
PO Contract Normally signed by just the buyer, used for simple commodities, they become contracts when they are ‘accepted’ by ‘performance’ e.g. seller ships purchased equipment.
T&M Contract Payment is on a per time or per item basis, so it is useful when effort level is not defined at contract signing. Has FP element (the hourly or per item price) and CR element in the open ended volume. Best for low cost, short-term contracts. Caps can be set.
Unit Price Contract
Same as time and materials.
CR Cost reimbursable is useful when scope is uncertain. Buyer incurs more risk because he relies on seller’s accounting of costs to be paid.
CPF / CPPC
Cost plus fee / Cost plus percentage of costs is bad for buyers and not allowed for US federal contracts. Sellers are not incented to offer value. They profit from higher pricing.
CPFF Cost plus fixed fee provides some incentive for seller to offer value as they do not profit from higher pricing.
CPIF Cost plus incentive fee allows an incentive to be paid over costs based on performance. The seller often shares cost savings or overruns with the buyer in an 80 / 20 ratio.
CPAF Cost plus award fee is same as CPIF but there is no penalty, just an predetermined award. Since it is awarded subjectively, a board is often used, making the process cost high
3 Point Estimate Program Evaluation and Review Technique.e.g. EAD is ( P + 4M + O ) / 6
Fast tracking Doing critical paths in parallel that were originally sequenced. (multiple tracks)
Crashing Adding resources to a critical path at increased cost. (crashes the budget too)
Checklist A list of things to inspect. A quality checklist is an output of Plan Quality.
Work authorization system Project manager’s system to approve the start of work packages.
Straight line depreciation The same amount is deducted from the value each period.
Change Management Plan
Controls changes to the project due to deviation from planned baselines. It is composed of change control procedures, approvals, board creation, meeting plans, and tools used.
Change Control System Standardized processes, tools and OPAs like forms and software to track project changes.
Configuration Management Plan Defines how to manage the specifications of the deliverables and control the changes to them.
Configuration Management System
Tools, documentation, and defined processes to track and verify conformance of the deliverable to the requirements.
Corrective Action Brings variance in line with the PMP performance baselines.
Preventative Action Address predicted, potential variance from PMP performance baselines.
Requirements management plan
How requirements will be controlled.
Process improvement plan
How the project processes will be improved.
Constrained optimization
A mathematical approach to project selection. Methods includes linear, integer, dynamic, and multi-objective programming.
Benefit measurement
A comparative approach to project selection. Methods includes murder board, peer review, scoring models, and economic models.
Present value
The value today of future cash. The present value is less, assuming a positive interest rate.
IRR Internal rate of return. This calculation includes others like BCR, so if when it is an option and positive, it is the best choice.
Marginal analysis
Determines when the benefit of quality improvements equal expenses incurred to make them, after which the return is not worthwhile.
Conformance Analysis
Tracking how close to the baseline ( e.g. to product requirements) the project is.
Design Of Experiments
Statistical experimentation that simultaneously changes all important variables for a faster, more accurate identification of the most critical.
Operational work
Ongoing, non-project work
Project objectives
The goals of project, created in the charter and later refined in planning. They determine completion of the project. More on Rita p24
Constraints Beginning with the charter, time, risk, cost, scope, quality, etc. are prioritized and managed by the PM for their affects on each other.
Projectized An organization type structured by projects. Functional is the opposite and matrix a mix.
Project coordinator
This is the project role between PM and project expediter, where the position has some authority of a PM.
Analogous estimating
A ‘top down’ method of predicting project time or cost, often based on previous data of similar projects. Sometimes provided by management as an expectation or cap on project. Accurate to +/- 50%
Critical Chain Method
A scheduling approach that considers resource availability. The schedule is adjusted to level resource requirements, by starting each as late as possible. (not as common on exam as critical path method)
Product life cycle
May include many project life cycles during its phases of conception, growth, maturity, decline, and withdrawal.
Project life cycle
Also has stages, depending on industry, like design, code, test. Differentiate this and above from Product Management Process.
Product Scope
Requirements of the project deliverable. (specifications, features, etc)
Project Scope
The work that will be done on the project.
Nominal Group Technique
A group’s ranking of ideas, usually those generated in same brainstorming meeting.
Product life cycle Everything needed to do the work.
Project Scope Statement
States the common interpretation of the project work. Can describe what is in and out of the product. Helps gain project buy in.
Variance
Quantifiable deviation from a known baseline.
Process Improvement Plan
A required part of project management is to plan in efforts to improve efficiency of the methods, not just effectiveness of the product.
Trigger Indicator that a risk has occurred or is about to. (warning sign)
Deming (method)
Plan, Do, Check, Act. He planned in quality vs. inspecting for it later.
Staffing Management Plan
Part of HR Plan (and so part of the PMP) describes how HR requirements will be met.(acquisition timing, resource calendars, etc)
Program Management
Centralized, coordinated direction of projects to achieve strategic goals. (Space Program)
Portfolio Management Projects or programs related with by an overall strategic business goal.(NASA)
Management by Objectives
Emphasis on realistic goal setting techniques, aligning with organizational strategy, monitoring variance, and corrective actions.
Projectized Organization
Opposite of functional org. Staff is structured into project specific silos.
Weighted Scoring Model
Factors are rated and compared toward a decision (vs. forecasting variables to predict as in constrained optimization)
Present Value
Amount of money needed to day in order to have a certain amount in the future.
Expected Present Value Present value analysis that considers to the opportunity being calculated.
PMIS Project management information system
Rolling Wave
Planning for near-term items in detail and future items at high level.
Definitive Estimating
Based on analysis of scope, risk, quality, etc.
Control Account
A level of the WBS management can use to capture cost, scope, EV, variance, etc. (How much will the solid rocket boosters cost?)
Lag and Lead A lag is a delay between one activity’s end and the next’s start. A lead is the opposite, where the next activity may start before the previous ends.
Free Float
Total Float
Project Float
Buffer before activity delays next activity.(LF-EF)
Buffer before project is delayed.
Buffer before project delay impacts customer.
Slack Same as float
Logic Bar Chart
Same as Gantt chart. Tracks activity durations and dependencies.
ConvergenceBurst
Network diagram arrows come together from multiple predecessors.Network diagram arrows fork to multiple successors.
1 Sigma
2 Sigma
3 Sigma
6 Sigma
68.26%
95.46%
99.97%
99.99985%
Weighted Milestone
? Has to do with 2 or more? reporting periods. Mentioned in the depreciation section.
Chart of Accounts
Account list used by accounting to track costs of projects or parts of project.
S Curve
Graph of earned value, planned value, and actual costs over time.
Cost Funnel
Early estimates have a wide range (+/- 50% / ROM) an later, definitive estimates have a tighter (+/- 5%) range.
What-if Scenario Analysis
Used with a schedule network analysis to test the implications of adverse conditions and ramifications on the project. Monte Carlo simulation is a common method.
Control Limit
Area on a control chart composed of 3 standard deviations from the mean.
Specification Limit
Area on a control chart composed of that indicates the customer’s requirements.
Total Quality Management
Deming’s approach to proactively improve quality with a focus on detailed statistical analysis.
Precision vs. Accuracy
Precision is the consistency of the result, whereas accuracy is the nearness to the target result.
Quality Metric An operational definition describing something in detail and how to measure it. (see comment 6 for more info)
Probability
The likelihood that something will happen. Exam totals probabilities as 1.0 or 100%.
Population Testing
You test the entire batch (e.g. all airliners) vs. sample testing where you determine some % of the batch to test (e.g. M&M’s)
Variable A generic characteristic of the product that is unknown, like weight, that will be measured by the QC process
Attribute The measurement of the variable.
Rule of 7
If 7 consecutive data points appear on one side of the mean, the process is out of control.
Assignable Cause
An anomaly on a control chart whose reason of failure requires investigation. Also called special cause.
RACI Chart
(R)esponsibility, (A)ccountability, (C)onsult, (I)nform chart uses R, A, C, and I to indicate roles in a table format with people on one axis and project area on the other.
RAM Chart
Responsibility Assignment Matrix: chart uses (P)rimary and (S)econdary tags to label roles in a table format with people on one axis and project area on the other.
Herzberg Theory
Hygiene (job attributes like supervision, peers, salary) affects job dissatisfaction and satisfaction is driven by ‘motivators’ such as professional growth and recognition.
McGregor’s Theory
Theory of X and Y is that managers use one of 2 methods to categorize workers: theory X states that workers are inherently lazy and avoid work and theory Y that workers may be ambitious and self-motivated.
Project Manager Powers
Formal/Legit, Reward, Penalty, Expert, Referent. Reward-based and expert power are best options.
McClelland Theory of Needs Achievement, affiliation, or power drive worker motivation
Conflict Sources Fall in this order of frequency: Scheduling problems, scarce resources, personal workstyle, technical direction, methodology details, cost, personality.
Paralingual Voice characteristics like pitch and tone.
Status Report
Progress Report
Reflects current status.
Reflects accomplishments during a specified time period.
Communication Model / Components Sender, message and Receiver
Communication Types
Formal Written: Contract changes, Performance issue escalation.
Informal Written: Emailing a meeting invitation.
Informal Verbal: Discuss performance problem with team member.
Formal Verbal: Presentations to mngt, hosting a bidder conference.
Bid Peddling
Bid Shopping
Using existing bid details to solicit additional bids.
Using existing lowest bid to solicit additional, lower bids.
Risk Register
Lists risks, risk owners, triggers, responses, and risk analysis results.
Secondary Risk
Residual Risk
New risks created by initial risk responses
Risk remaining after the risk response.
Workaround
Real-time contingency response to an issue, used in monitoring and controlling. Also referred to as ‘winging it’
Risk Response Options
Opportunities can be shared, exploited, or enhanced. Threats can be avoided, transferred, or mitigated. (S.E.E. the A.T.M.)
3 S.O.W. Types
Performance, functional, and Design.
Contract Requirements Capacity, Consideration, Offer, Legal Purpose, Acceptance. (C.C.O.L.A)
Cost Management Plan
Specifications for currency used, estimates’ level of accuracy (level of the WBS used), reporting formats, cost performance measurement rules, to include direct and/or indirect costs, and control thresholds.
3 Estimate Ranges R.O.M. is +/- 50%
Budget Estimate is -10% to +25%
Definitive Estimate is +/- 10% or some use -5% to +10%
50 / 50 Rule
20 / 80 Rule
0 / 100 Rule
50% of project is considered complete at start and 50% at finish.
20% of project is considered complete at start and 80% at finish.
No progress credit is given until activity is finished.
Special Conditions These are added to address considerations not already in the term and conditions
Negotiation Tactics
Attacks, personal insults, good guy/bad guy, deadline, limited authority, missing man, fair and reasonable, delay, extreme demands, withdrawal, and fait accompli (an established fact).
Conflict Resolution Techniques In order of preference: confronting/problem solving, compromising, withdrawal, smoothing, collaborating, and forcing.
Scope Verification
Product Verification
Customer acceptance of the product.
Properly completing the product work.
Change Requests types output Monitoring and Controlling
Corrective action, preventative action, and defect repairs
Change Process steps
Evaluate the impact, create options, get internal approval, and get customer buy-in.
Scope Management Plan
How will the project scope be planned, defined, executed, measured, verified, and controlled?
Focus Group
A specific group of expertise discuss product ideas via a moderator.
Facilitated Workshop
A variety of perspectives are combined to discuss the product and build consensus.
Nominal Group Technique
Brainstorming ideas are recorded and ranked.
Affinity Diagrams
Requirements are sorted into like categories to better identify what may be missing.
Plurality Technique
In group decision making making, this method chooses the option with the most support, in the event there is no majority choice. Other GDMT methods are consensus, majority, dictatorship and unanimity.
Balancing Stakeholder Requirements Prioritizing project requirements and evaluating scope, cost, etc to meet everyone’s competing needs.
Product Analysis
Work may be needed during collect requirements to define the product being requested.
Schedule Management Plan
Denotes management of project schedule, baseline and handling changes, tools used, and methods to track performance and variance.
Schedule Baseline
The schedule baseline is the agreed upon schedule for the project. It’s created via iterations during planning and part of the PMP.
Value Analysis / Value Engineering
Improving the cost effectiveness of how you get the work done.
Management Reserves
The project funding allotment minus (what is budgeted) and the cost baseline (what is needed). Accounts for unforeseen expenses.
Powers of the PM Formal/legitimate, Reward, Penalty, Expert, and Referent. The fist 3 are official. The last 2 are earned.
Risk Management Plan
Components include risk methodologies, roles and responsibilities, budgeting, timing, categories, probability and impact definitions, stakeholder tolerances, reporting formats and tracking/auditing.
Risk Categories
These can be general, like internal/external, specific like lack of available materials, or team expertise, or source-based like schedule, cost, etc.
Risk Register Updates
Include prioritized, quantified risk list, contingency time and cost reserves, confidence levels of time and cost estimates, probability of objectives, and risk trends across updates, contingency responses, .
Procurement Documentation
The procurement S.O.W., proposed contract term and conditions, and information for sellers (project background, bid procedures/guidelines/forms, source selection criteria, and pricing forms)
Special Provisions
Contract changes to address a particular project’s risks, requirements, legal, or other issues.
Privity A contractual oblication
Force Majeure
Legally, and act of God event, such as an earthquake.
Fait accompli
A foregone conclusion in a contract, e.g. we’ll need to budget for safety measures.
Constructive Changes
Things a buyer does that interfere with the seller’s ability to meet the contractual obligations. At that point the seller may file a claim.
Records Management System Documents that need to be managed according to a particular project’s specific needs. These can range from just the important formal docs like contracts to all written communications like emails and meeting notes.
Known Unknowns
Unknown Unknows
Risks are unknowns, so this is just another way of saying “known risks  and unknown risks”. Known risks are identifiable things like design delays and handled by contingency reserves. Unknown risks are not identifiable and handled by management reserves.
Human Resources Plan
Components include:  roles and responsibilities, org charts and staffing management plan
Standard Deviation
The amount of range, sigma or exactitude in an estimate.
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10 comments to PMI Definitions

  • Kia

    Hi. thank you so much for your site, I’m finding it extremely helpful in studying for the PMP exam. I’d like to add to one of your definitions.

    Weighted milestone – a method of Earned Value that gives percentages to the milestones that make up a discrete work package. the percentages may be different but must sum up to 100%
    e.g. work package – painting the kitchen
    50% is getting the walls painted beige
    30% is getting the cabinets painted blue
    20% is getting the window frames/panes painted grey

    hope this helps. thanks again!

  • Piyush V Dubey

    Thanks I completed my PMP on 30/08/2011. your site was confidence booster for me.

  • mark

    Thanks Kia! I’ll leave your definition in place on this page. Appreciated!

    Congratulations Piyush! I appreciate your letting me the information helped.

  • Keegan Pather

    Hi, what is the definition of “Operational Definitions”?

    Thanks.

  • Hi Keegan,

    Given the other definitions around this term, I think I used it in the context of quality statistics. In PMBOK 4th edition, page 200, section 8.1.3.2 it defines a quality metric as an operational definition that very specifically describes an attribute and how to measure it. I should probably update the definition to “quality metric” instead of just “metric”.

    So an operational definition would be one specific to the actual work like: “the parts per million of chlorine in waste water as measured by on-site testing”. This would be in contrast to more general definitions like: “Focus Group”.

    Best,
    Mark

  • khandker islam

    Is the following rule apply for payment of bills or reporting status of work progress?
    50 / 50 Rule
    20 / 80 Rule
    0 / 100 Rule

  • Hello Khandker,

    It is not so much about reporting progress as it is, how to recognize a project’s completeness. It’s related to earned value insofar as it determines how to record the status. An example the 0/100 Rule is you may be 80% competed with the work required to launch a satellite, but the project will likely not be considered completed, until you successfully put it in orbit.

    Best,
    Mark

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