Article Archives: Project Management

Benefits of the PMP® Certification

Introduction of the PMI-PMP® Certification?

PMP® is the most reputable and recognized Project Management Certification across the globe, particularly in US, Australia and India. More than 724,773 professionals across industry verticals have chosen the PMP® certification by the PMI®, USA to get Global recognition. Getting that PMP® certification might not be the easiest thing you will do in your career but it will challenge you in a good way. You will gain self-confidence, knowledge and connections you wouldn’t otherwise have.


Benefits of the PMP® Certification :

1. Global Recognition

The PMP® Certification establishes that you understand the global language of Project Management and are ready to work across industries, markets and geographies. PMI® certifications are not based on one specific methodology, so they’re flexible and adaptable. Clearing the PMP® exam and achieving a PMI-PMP Credential would thus help a professional showcase their skills and expertise to potential global employers.

2. Shows your professional approach

By earning the PMP® credential you show your peers, supervisors and clients your commitment to profession, PMI’s code of ethics and your ability to perform the function of a project management professional to certain level.

3. Endorsement of your Skills and Knowledge

The PMP® certification is a stamp of approval of your knowledge, skills and abilities. The PMI® (The Project Management Institute) serves as an unbiased endorsement of your project management knowledge and professional experience on a global level.

4. Shows that you are ready for Challenges and can handle Complex Projects

The PMP® certification indicates your willingness to invest in professional development. This provides certification holders an awareness of changing processes and terminology in the field. The PMP® certification helps you use globally accepted and proven methodology in your project leading to better outcomes.

5. Skill improvement

Preparation for a PMP® certification requires study and review of current project management processes (The PMBOK® defines 47 processes – categorized into 5 basic process groups and 10 knowledge areas, that are typical of most projects, most of the time) Earning a certification highlights your knowledge and competence & proficiency in your practice.

6. Hiring Capacity

When hiring, many companies are now giving preference to Project Managers who are PMP® certified. It’s gradually becoming the “Must have” skill/credential to apply for jobs.

7. Better Salary

The PMP® Certification leads to steep hike in salary. On average PMP’s earn 20% more than their non-certified counterparts, according to a recent PMI® survey.

8. Helps you evaluate potential employees and team members

Let’s face it, we’ve all had teams that for whatever reason did not work together as a cohesive group. By obtaining the PMP® certification, you will learn valuable skills that will in turn help you to evaluate whether or not that potential team member will be able to work well with everyone.

9. Job security level

PMPs are secured even during economic downturn. While no one is immune to layoffs and downsizing, 80% of executives around the world believe that having a PMP® Certification demonstrated core competencies that made the certification holders valuable even during a recession.

10. Makes your Resume more attractive

If you’re looking for a job as a Project Manager, the PMP® certification is a great credential to add to your resume. Recruiters often use certification to narrow their candidate pool.

Forecasting

Forecasting is to predict the future condition of the project by comparing the progress of the project and with what we planned. By using Forecasting technique one can arrive at three parameters namely Estimate At Completion (EAC), Estimate To Complete (ETC) and Variance At Completion (VAC).

EAC: How much money is required to complete the entire project. This is as good as new Budget At Completion (BAC).

ETC: How much more money is required to complete the remaining work.

VAC:The difference between (or the variance between) original budget and the new budget. This can be surplus or deficit.

 

Here are different formulas used to calculate EAC, ETC and VAC :

i) ETC=EAC-AC

ii) VAC=BAC-EAC

 

There are four different variants to calculate EAC :

1. EAC = BAC/CPI — This is used if the current variances or the rate of spending of money remains same

2. EAC = AC+BAC-EV — This is used if the estimation has become abnormal for the work so far it is carried out and the remaining work will continue at the same budgeted rate.

3. EAC = AC+ETC — This is used when the estimation for the remaining work no longer exists and the new estimation to be carried out for the remaining work. ETC is nothing but remaining work which can be derived using bottom up estimation.

4. EAC = AC+((BAC-EV)/SPI*CPI)—This is used considering both the schedule and cost which can influence the remaining work.

 

To calculate the forecasting, first we need to complete the Earned Value Management (EVM), where we can obtain the parameters AC, PV, EV, SV, CV, SPI and CPI.

Forecasting technique is used under the process Control Costs.

To-Complete Performance Index (TCPI)

TCPI is to calculate the cost performance to be achieved in order to meet the project goals. The ratio of remaining work to be completed with remaining budget provides the TCPI.

To calculate TCPI first we need to calculate the EVM (Earned Value Management) and then based on AC (Actual Cost) , EV (Earned Value) we can calculate TCPI. TCPI is calculated under two conditions one with original budget and the other with new budget.

TCPI=(BAC-EV)/(BAC-AC)—With planned budget

TCPI=(BAC-EV)/(EAC-AC)—With new budget

BAC = Budget at completion

The ratio should be ideally 1. If it greater than 1, then difficult to complete and if less than 1 easier to complete.

TCPI is used as a technique under the process Control Costs.

Cost Benefit Analysis

Cost Benefit Analysis technique is used to see the benefit we can get after investing the money. This technique can be used during initialization to check is it worth to invest by calculating the return as part of business case and or can be for improving the quality while considering the cost of quality.

For example, what can be the reduction in the defect, how much of network downtime can be reduced, how much of wastage or scrapping of the raw materials can reduced etc…

We know that as the quality increases the cost also increases. But in the end we need to see is it worth for the investment so as to get the benefit. Cost Benefit Analysis technique is used under the process Plan Quality Management.