Quick glossary: Project management
October 11, 2016
Every discipline has its own vocabulary, and project management is no exception. This list of terms and definitions will help ensure that your PM communications are clear and understood by everyone.
From the glossary:
External circumstances or events must occur for the project to be successful (or that should happen to increase your chances of success). If you believe that the probability of the event occurring is acceptable, you can list it as an assumption. An assumption has a probability between 0 and 100%; that is, it is not impossible that the event will occur (0%), and it is not a fact (100%)—it’s somewhere in between. Assumptions are important because they set the context in which the remainder of the project is defined. If an assumption doesn’t come through, the estimate and the rest of the project definition may no longer be valid.
The person or group that is the direct beneficiary of a project or service is the client/customer. These are the people for whom the project is being undertaken (indirect beneficiaries are stakeholders). In many organizations, internal beneficiaries are called “clients” and external beneficiaries are called “customers,” but this is not a hard and fast rule.
Constraints are limitations that are outside the control of the project team and need to be managed around. They are not necessarily problems. However, the project manager should be aware of constraints because they represent limitations that the project must execute within. Date constraints, for instance, imply that certain events (perhaps the end of the project) must occur by certain dates. Resources are almost always a constraint, since they are not available in an unlimited supply.
The cost variance (CV) is used to measure the cost difference between a project’s earned value (EV) and the actual cost (AC) to deliver progress to date (CV = EV – AC). In application, positive CVs indicate the project is under budget, since it is delivering more value than incurring cost. If the project has a negative CV, it is over budget. Even positive CVs should be examined for root cause.
The critical path is the sequence of activities that must be completed on schedule for the project to be completed on schedule. It is the longest duration path through the workplan. If an activity on the critical path is delayed by one day, the entire project will be delayed by one day (unless another activity on the critical path can be accelerated by one day).