PMI®

AUTHORIZED
PMP® EXAM
PREP COURSE

Version 3.1 | 2023 Release

Welcome
Thank you for joining the PMI® Authorized PMP® Exam Prep course.
If you’ve earned your CAPM® certification with us, welcome back!
Or if you’re coming from another project management background, certification
or work experience, we are pleased to welcome you to PMI’s community of learning.
We are proud of our 50-year history of peer-to-peer learning and membership and wish you
the best of luck as you undertake your PMP® exam preparations.

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What is a
Project?

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Project
A project:

• Creates a unique product, service or result

• Is time-limited
• Drives change
• Enables value creation for a business or organization

Project success depends on:

• Organizational project maturity

• Project manager effectiveness
• Funding and resource availability
• Team member skill levels
• Collaboration and communication within the team and with key
stakeholders
• Understanding of the core problem and related needs

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What is a
Project
Management?

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What is a
Project
Management?

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 1. Develop a software for a process that is currently not automated
Project- 2. Upgrade a software for improving the user interface
Examples 3. Develop an online safety related course for the employees
4. Build a skyscraper
5. Construct a bridge

1. Launch a new technological gadget in a different country

2. Revamp the positioning of a brand of a product
3. Conduct the annual international conference for the company
4. Measure customer loyalty
5. Launch a TV ad campaign

1. Implement a cost-reduction strategy

2. Implement a new process improvement technique at the manufacturing facility
3. Implement a new regulatory guideline imposed by the government
4. Check the feasibility of expanding the product range
5. Develop a new product to stay ahead of competition

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 1. Develop a software for a process that is currently not automated
2. Upgrade a software for improving the user interface
Project- 3. Develop an online safety related course for the employees.
Examples 4. Build a skyscraper
5. Construct a bridge

1. Launch a new technological gadget in a different country

2. Revamp the positioning of a brand of a product
3. Conduct the annual international conference for the company
4. Measure customer loyalty
5. Launch a TV ad campaign

1. Implement a cost-reduction strategy

2. Implement a new process improvement technique at the
manufacturing facility
3. Implement a new regulatory guideline imposed by the
government
4. Check the feasibility of expanding the product range
5. Develop a new product to stay ahead of competition

Projects happen everywhere

Project management is ubiquitous
©
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Project This management
material is being providedis a life-skill
as part ®
of a PMI course.
History

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History -
Aftermath of WW2 • Many survivors of the war were homeless, hungry, and unemployed.

• Factories, railroads, bridges, electric power plants, and water systems were
damaged or destroyed.

• Inflation robbed the wages of those who were employed.

• Farmers suffered from drought and when they brought their products to
market, city dwellers could not afford them.

• Trade and the flow of capital needed to finance reconstruction were

interrupted.

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 • The Marshall Plan in Action The basic purpose
History -
The Marshall Plan of the Marshall Plan, according to the Economic
Cooperation Act, was to ensure “individual
liberty, free institutions, and genuine
independence” by restoring “sound economic
conditions.” Between 1948 and 1951, the Marshall
Plan attempted to implement several economic
strategies and reforms to rebuild Western Europe.
It aimed to:

• meet immediate need for food, medicine, and

housing
• increase industrial and agricultural production by
rapidly rebuilding factories, railroad, bridges, etc.
• combat inflation and establish financial stability.

• create a common market free of national trade

barriers.

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History - Stage 1 (Prior to 1958)
Stages 1 to 4

Defining Projects:
● Manhattan Project: (First nuclear weapon development)

An iconic and successful project, it required a sprawling,

multifaceted approach but was nevertheless vital.
Project leadership had a purely administrative role,
separate from any engineering or research duties.

● Polaris Project:

The first submarine-launched nuclear missiles were

developed by the Navy Special Projects Office early in
the Cold War. On this project, tools like PERT analysis
were developed by project managers to help manage
schedules.

● Interstate Highway System:

Construction of the highway system was one of many

capital projects, in the USA and elsewhere, that were
begun around this time. Adequate project progress
Copyrightrequired work
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requiring tight organization.
History -
Stages 1 to 4
Stage 2 (1958 to 1979)

Defining Projects:
● Space Program and Apollo:

Including some of the most significant projects in history,

the space program relied heavily on project scheduling
models and other project planning tools. Refinements on
CPM, PERT, and the WBS were all used.

● ARPANET: (Advanced Research Projects Agency

Network)

First coming online in 1971, this network linking various

learning and research institutions would form the basis
of the modern Internet. Without specific project leaders,
it was a collaborative effort.

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History -
Stages 1 to 4 Stage 3 (1980 to 1994)

Defining Projects:
● English-France Channel Tunnel:

The Channel project was complex not only because of

its international nature, requiring coordination of
governments, financial institutions, and more. It also was
complicated by multiple measuring systems, as well as
the need to have two groups digging from opposite sides
meet in the middle.

● Challenger Investigation:

A project in itself, the aftermath of the Challenger

disaster was primarily an investigation of another
project’s failure. A focus on managing risk and quality
assurance followed.

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History -
Stages 1 to 4 Stage 4 (1995 to Present)

Defining Projects:

● Y2K: As the year 2000 approached, it was realized

fundamental software architecture wouldn’t be able to
process dates starting with a two. Rather than a single
project, Y2K was a tremendous number of parallel software
projects around the world that often required coordination,
sharing talent and resources.

● Panama Canal Expansion: As global trade increased, the

Panama went from a vital passage to a chokepoint causing
innumerable delays. The series of complex projects to widen
and expand the canal, while simultaneously keeping it open
to traffic, experienced delays and hiccups. Eventually costing
over 5 billion dollars, it was finished over a year late.

● Large Hadron Collider: With a project lifecycle extending over

half a century, LHC construction faced a number of
challenges. Funding came from multiple governments.
Gathering project requirements involved ongoing research.
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History -
PMI Inception

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The Evolution ca. 1969 – PMI founded

of Project The application of

Management knowledge, skills, tools and
techniques to project
activities to meet the project
requirements

Can you describe, in

your own words, how
project management has
changed during this
time? 2022 - Toward a systems view

“Projects do not simply produce outputs, but more

importantly, enable those outputs to drive
outcomes that ultimately deliver value to the
organization and its stakeholders.”

- PMBOK® Guide - Seventh edition

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History -
PMI Certifications

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You, Getting Certified

• Four-year degree
• 36 months leading projects
• 35 hours of project management education/training
or CAPM® certification

— OR —

• A high school diploma or an associate’s degree

(or global equivalent)
• 60 months leading projects
• 35 hours of project management education/training or
CAPM® certification
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 1. 36 months (3 years) work experience in handling projects
PMP 2. PMP Training certificate
Certification 3. Apply for candidature approval on PMI website
Process
4. Prepare 1.5 to 2 months (2 -3 hrs a day, 5 days a week)
5. Take the exam (Congratulations, You are a PMP)

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 1. 180 questions in 3 instalments of 60 each
PMP 2. 230 minutes in total
Certification 3. Mostly MCQs with single right answer
4. Some MCQs with more than one right answer
Process 5. Very few Fill in the Blank and Match the following

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PMP
Advantages

Structured, exhaustive & relatable topics

Generic –applicable to all industries

Broad syllabus coverage – Across domains (engineering, quality,

psychology, operations, business strategy)

Library of Case studies and such material

Guides/Standards/Reference material

Revision every 3 -4 years; latest in Jan 2021 –

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Project management
dynamic

Once a project is authorized, it is formally initiated.

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Project management
dynamic

PDCA Cycle
An Organization exists in
an external and internal
environment.

Based on the relevant

factors, the organization
chooses strategic
objectives.

Projects that contribute Once a project is authorized, it is formally initiated.

to strategic objectives in
the best way are chosen
and authorized.

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Project management
dynamic

PDCA Cycle
An Organization exists in an external
and internal environment.

Based on the relevant factors, the

organization chooses strategic
objectives.
Once a project is authorized, it is formally initiated.

Projects (Interventions, if the

organization or their industry does not
use project management terminology)
that contribute to strategic objectives in
the best way are chosen and
authorized. Copyright 2023© Project Management Institute, Inc. All rights reserved.
This material is being provided as part of a PMI® course.
25
 Project management dynamic – Logical flow

Before the After the formal

formal initiation initiation of any
of any project project

An Organization exists in an external and PDCA (Plan Do Check Act) Cycle

internal environment. Based on the relevant
factors, the organization chooses strategic
objectives.

Projects, Programs, Portfolios (Interventions, Once a project is authorized, it is formally initiated.

if the organization or their industry does not use
project management terminology) that contribute
to strategic objectives in the best way are
Copyright 2023© Project Management Institute, Inc. All rights reserved.
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26
Organizational
Strategy
Portfolio
Hewlett Packard (HP)
Program
Project

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Organizational
Strategy
Portfolio
Program HP Compaq Merger in 2001
Project

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https://www.mbaknol.com/management-case-studies/case-study-the-hewlett-packard-and-compaq-merger/
Organizational
Strategy
Portfolio
Program
Project

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https://www.mbaknol.com/management-case-studies/case-study-the-hewlett-packard-and-compaq-merger/
Organizational
Strategy
Portfolio
Program
Project

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Organizational Portfolios (Any Government during stable times)
Strategy
Portfolio 1. Portfolio 1 with Strategic Objective = Improve Living
standard of common citizens
Program
Program 1.1 Several similar projects across states for
Project modernization of railways
Program 1.2 Several similar projects across states for
setting up better health infrastructure across states

Collection of programs and 1. Portfolio 2 with Strategic Objective = Uplift the

projects that have common underprivileged citizens
strategic objective
Program 2.1 Several similar projects across states for
Collection of facilitating free shelter
related/similar Program 2.2 Several similar projects across states for
projects facilitating free education

1. Portfolio 3 with Strategic Objective =

Establish/Maintain Impressive International presence
Program 3.1 Several related projects to host ‘Olympics’
Project 3.2 Space Mission
Project 3.3 Tallest building in the world
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 Project management dynamic – Logical flow
1. People
ECO 2. Process
Domains =
3. Business Environment
Before the After the formal
formal initiation initiation of any
of any project project

An Organization exists in an external and PDCA (Plan Do Check Act) Cycle

internal environment. Based on the relevant
factors, the organization chooses strategic
objectives.

Projects, Programs, Portfolios (Interventions, Once a project is authorized, it is formally initiated.

if the organization or their industry does not use
project management terminology) that contribute
to strategic objectives in the best way are
Copyright 2023© Project Management Institute, Inc. All rights reserved.
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32
The PMP® Exam

The PMP® exam includes content that

spans the value delivery spectrum,
including predictive, adaptive and hybrid
approaches. It was updated in 2021 to
reflect the fuller complement of skills and
approaches found in our dynamic and
global profession.
Just like the sides of the PMI Talent
Triangle®, we focus on three performance
domains in project management:

People | Power Skills – 42%

Process | Ways of Working – 50%
Business Environment | Business Acumen
– 8%

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Learning
Topics

The learning topics in this training come directly from the PMP® exam
content outline (ECO). The ECO is the basis for the PMP® exam.

The ECO was created by a global selection of PMI members who

hold the PMP® certification and work in diverse industries. It includes
what they think you need to know to do the job, including experience
and broader business concepts.

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Exam Content Outline (ECO) - People, Process, Business Environment

https://www.pmi.org/certifications/project-management-pmp
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Exam Content Outline (ECO) - People (42%)

Copyright 2023© Project Management Institute, Inc. All rights reserved.

This material is being provided as part of a PMI® course.
Exam Content Outline (ECO) - Process (50%)

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This material is being provided as part of a PMI® course.
Exam Content Outline (ECO) - Business Environment (7%)

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Projects,
Programs, Collection of projects, programs,
Portfolio subsidiary portfolios and operations Aligns with
Portfolios Management managed in a group to achieve business strategies
strategic objectives

Group of related/similar projects,

subsidiary programs and program Controls
Program activities managed in a coordinated components and
Management manner to obtain benefits not interdependencies
available from managing them to realize benefits
individually

Enables
achievement of
Project Part of a broader program, portfolio
organizational
Management or both
goals and
objectives

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Organizational
Strategy
Portfolio
Program
Project

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Source: PMBOK Guide 7
Organizational
Environment

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Organizational PESTLE
Strategy
External Environment
Frameworks
1. PESTLE/ VUCA/ TECOP

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Source: https://www.impact-innovation.co.uk/pestle-analysis
Organizational PESTLE
Airlines
Strategy
External Environment
Frameworks
1. PESTLE/ VUCA/ TECOP

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Source: https://www.edrawmax.com/article/airline-industry-pestel-analysis.html
Organizational VUCA
Strategy
External Environment
Frameworks
1. PESTLE/ VUCA/ TECOP

Copyright 2023© Project Management Institute, Inc. All rights reserved.

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Source: https://drvidyahattangadi.com/dealing-with-vuca-world/
Organizational
Strategy
External Environment
Frameworks
1. PESTLE/ VUCA/ TECOP

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45

Source: https://www.linkedin.com/pulse/risk-management-key-successful-projects-adrian-predoi-pmp-rmp
 Boeing
Organizational
Strategy Boeing - Portfolios
External Environment
Frameworks
1. PESTLE/ VUCA/
TECOP

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 Boeing
Organizational
Strategy
External Environment Boeing - Commercial Airplanes Portfolio
Frameworks
1. PESTLE/ VUCA/
TECOP

Boeing - Portfolios

Commercial Airplanes account for approximately

40 to 45 %percent of Boeing Corporate revenue.

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 Boeing
Organizational
Strategy
External Environment
Frameworks
1. PESTLE/ VUCA/
TECOP

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Organizational Porter’s 5 Forces
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces

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Source: https://www.business-to-you.com/porters-five-forces/
Organizational Porter’s 5 Forces
Microsoft
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces

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Source: https://www.pngegg.com/en/png-erddc
Organizational Porter’s 5 Forces
Mercedes
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces

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Source: https://bmvsmb.wordpress.com/2014/10/22/porters-5-forces-competitive-analysis-of-the-luxury-car-industry/
Organizational SWOT Analysis
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces
3. SWOT Analysis

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Source: https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis
Organizational SWOT Analysis
Amazon
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces
3. SWOT Analysis

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Source: https://www.wordstream.com/blog/ws/2017/12/20/swot-analysis
Organizational SWOT Analysis
Infosys
Strategy
External Environment
Frameworks
1. PESTLE
2. Porter’s 5 Forces
3. SWOT Analysis

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Source: https://twitter.com/finventuredotin/status/1301859229263831040/photo/1
Strategic
Alignment and
Do you:
Business
Management • Know your organization’s strategic plan?
Skills • Understand how project goals matter to an organization's long-term
vision and mission?
• See a high-level overview of the organization?
• Have a working knowledge of business functions?
• Have pertinent product and industry expertise?

Can you:

• Explain the essential business aspects of a project?

• Implement strategy to maximize the business value of project?

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Internal Business
Environment Factors

• Organizational changes can

dramatically impact scope
• The project manager, project
sponsor or product owner need to be
familiar with business plans,
reorganizations, process changes and
other internal activities
• Internal business changes might cause:
• Need for new deliverables
• Reprioritization of value, including
removal of existing deliverables

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Get to Know
Organizational Cultures
and Styles

• View of leadership, hierarchy and

authority
• Shared vision, beliefs and expectations
• Diversity, equity and inclusion practices
• Risk tolerance
• Regulations, policies and procedures
• Code of conduct
• Operating environments
• Motivation and reward systems

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Organizational
Structures

• Functional Organizational structure and governance affects/determines:

• Matrix
• How organizational groups and individuals interrelate
• Project-oriented
• How much authority the project manager has
• Composite • What resources will be available
• How the project will be conducted

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Relative Authority in Organizational Structures

Functional Matrix Project-oriented

Team member Functional

Conflicted loyalty Project
loyalty department
Both functional
Team member
Functional manager manager and project Project manager
reporting
manager

Project manager Coordinator to full Full-time and

Seldom identified
role project manager responsible

Part-time/Full time on Full-time on project

Team member role Part-time on project
project (preferred)

Control of project Nonexistent Medium – shared with

manager over team (functional manager functional High
members controls) manager/sponsor

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Relative Authority in Organizational Structures

Functional Matrix Project-oriented

Weak Balanced Strong

Team
Functional
member department Conflicted loyalty Project
loyalty

Team
Functional
member manager Both functional manager and project manager Project manager
reporting

Project
Project
manager Seldom identified Coordinator Project Manager Full-time and responsible
Manager
role

Team
Part-time on Full-time on project
member project Part-time/Full time on project (preferred)
role

Control of
project Nonexistent FM and PM PM has more
FM has more
manager (functional have equal authority than High
manager controls) authority than PM
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 PMOs can be:
Project
Supportive
Management • Develop best practices, methodologies, standards and templates​
Office (PMO)* • Coach, mentor, train, guide project managers​

Controlling​
• Monitor compliance with project management standards, policies,
procedures and templates via project audits​

Many large and Directive​

established project- • Manage shared resources​
oriented organizations
• Coordinate communication across projects
have a PMO, but PMOs
are not a requirement for
project management Agile Centers of Excellence (ACoEs)
practice. aka Value Delivery Office (VDO)

ACoEs enable, rather than manage, project efforts:

• Coach teams
• Build agile mindset, skills and capabilities throughout the
organization
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 Lesson 1 Business Environment - Topic 1B Strategic Alignment

Organizational
Favorable/Unfavorable
Influences Influences

Enterprise Environmental Factors Refers to all the implicit input or

Conditions outside the
assets on processes used by
(EEFs) immediate control of the
Internal and External an organization in operating a
Internal
team, and that influence,
• Internal and external to the EEFs business. This may include, but
OPAs
constrain, or direct the
organization (Click to show definition) is not(Click
limited to, business
to show definition)plans,
project, program, or
processes, policies, protocols,
portfolio.
and knowledge.
Organizational Process Assets (OPAs)
• Project policies, procedures and
templates
Process, Corporate
• Historical project information External Internal Policies and Knowledge
Procedures Base

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OPAs and
EEFs OPAs EEFs

Processes, policies and Internal

procedures
Examples—
Examples— • Resource capabilities
• Organizational charts • Organizational culture
• Procurement rules • IT software
• Hiring and onboarding procedures • Distribution of facilities

Organizational knowledge bases External

Examples— Examples—
• Engineering wikis • Marketplace conditions
• Libraries or archives • Laws, regulations and standards
• Lessons learned repositories • Operating conditions
• Social and cultural influences
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Business Value

• The net quantifiable benefit (tangible

and/or intangible) identified from a
business endeavor
• Part of the objectives or description of
the project in the initiating agreements
• Benefits realization is based on declared
business value

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Examine
Business
Value
• Communicate with stakeholders, do the research and use expert
knowledge
• Examine, evaluate and confirm to determine exactly what is or can be
of value!

Look especially at:

• Shareholder value (publicly traded companies) or

business growth (private)
• Customer value
• Employee knowledge
• Channel or business partner value

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Types of
Business
Value

Financial New Social

Gain Customers Benefit

First to Improvement Regularization

Market Technological, Alignment or
process, etc. compliance with
standards and
regulations

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Needs
Assessment
• Usually performed by a business analyst
Obtain Data for
• Precedes the business case
the Project
• Involves understanding of:
• Business goals and objectives
• Issues and opportunities

• Recommends proposals to address:

• What should be done
• Constraints, assumptions, risks and dependencies
Note: From Business • Success measures
Analysis for
Practitioners: A Practice • Implementation approach
Guide

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Business
Documents

• Are developed prior to project start (usually by a business analyst or

key project stakeholder) ​

• Contain information about the project’s objectives and contribution to

the business goals​

• Help the business to determine whether a project is worth the

required investment of time, money, and resources

Review the business documents periodically

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Business Business case:​ justifies project and establishes boundaries
Documents • Cost-benefit analysis
• Business need
Business Case
• Quality specifications
and Benefits • Schedule or cost constraints
Management
Plan Acceptance of the business case usually leads to creation of the
project charter.

Benefits management plan​ should include:

• Processes for creating, maximizing and sustaining project
benefits
• Time frame for short- and long-term benefits realization
• Benefits owner or accountable person
• Metrics
• Assumptions, constraints and risks

This is a business document, not part of the project

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This material is being provided as part of a PMI® course.
Benefit Cost-benefit analysis: How businesses justify the selection
(authorization) of a project ( Benefit to Cost Ratio – BCR)
Measurement
Methods Business - “smaller is better”
• Estimate payback period — Smallest number (duration) chosen
• Assess opportunity cost — What if we didn’t undertake the
project?

Financial - largest number (profit) chosen - “bigger is better”

• Time value of money
• Present value (PV)
• Future value (FV)
• Net present value (NPV)
• Internal rate of return (IRR)
• Return on investment (ROI)

You will not need to calculate any of these for the exam. ​

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 S Project Selection
Project 1 Project 2 Project 3 Selection
Project No Method

Selection Project 1
NPV
Methods 1
(Net Present Value)
$ 108990 $ 1000 $ (-8000) (Higher the better;
negative no use)

IRR
Project 1
2 ( Internal Rate of 10% 8% 6%
(Higher the better)
Return)

ROI( Project 1
3 Return on 15% 11% (Higher the better)
8%
Investment)

BCR
Project 1
(Benefit to Cost
(Higher the better; less
4 Ratio) or 1.45 1.13 0.87
than one, no use)
PI (Profitability
Index)

Project 2
5 Payback Period 5 years 3 years 7Management
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(Lesser the better)
All rights reserved.
This material is being provided as part of a PMI® course.
71
 S Project Selection
Project 1 Project 2 Project 3 Selection
Project No Method

Selection NPV Most reliable

Project 1
Methods 1
(Net Present Value)
$ 108990 $ 1000 $ (-8000) (Higher the better;
negative no use)

IRR
Project 1
2 ( Internal Rate of 10% 8% 6%
(Higher the better)
Return)

Project 1
ROI(
(Higher the better;
3 Return on 15% 11%
8% negative no use
Investment)

BCR
Project 1
(Benefit to Cost
(Higher the better; less
4 Ratio) or 1.45 1.13 0.87
than one, no use)
PI (Profitability
Index)

Project 2
5 Payback Period 5 years 3 years 7Management
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(Lesser the better)
All rights reserved.
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Least reliable
72
Strategic Management Elements and Frameworks

Some agile projects use a goal-

setting framework such as OKRs
(Objectives and Key Results) that
describes the organization’s
objectives and desired key results.

ongoing

Note: From PMI’s Standard for Portfolio Management

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Organizational OKRs
Strategy
OKR

Copyright 2023© Project Management Institute, Inc. All rights reserved.

This material is being provided as part of a PMI® course.
Source: https://kanbanize.com/okr-resources/okr/examples
Organizational OKRs
Strategy
OKR

Copyright 2023© Project Management Institute, Inc. All rights reserved.

This material is being provided as part of a PMI® course.
Source: https://www.superbeings.ai/blog/okr-beginners-guide
How OKRs
Help Deliver • Start with organizational objectives
Business • Decide key desired results
Value • Refine further with objectives and key results (OKRs):
• Objectives are goals and intents
• Key results are time-bound and measurable milestones under
these goals and intents

OKR best practices:

• Support each objective with between 3-5 measurable key results
• Aim for 70% success rate to encourage competitive goal-making. A
100% success rate should be re-evaluated as not challenging
enough
• Write OKRs that are action-oriented and inspirational and include
concrete, measurable outcomes

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