Understanding Process Sigma Level

Six Sigma is a data-driven approach to quality, aimed at reducing variation and the associated defects, wastes and risks in any process. This article explores the basics of Six Sigma process quality – definition and measurement.

In a set of data, mean (μ) and standard deviation (σ) are defined as:

μ = x1 + x2 + x3 + … + xn) / n

Where x1 , x2 , … , xn are data values and n is the number of data elements, and  Standard deviation shows the extent of variation or spread of data. A larger standard deviation indicates that a data set has a wider spread around its mean. Process data usually has a normal distribution. The distance from the mean μ to a data value in terms of data units can be measured. For example, a data point with a value of x = 31 seconds is 6 seconds away from a mean value of 25 seconds. This distance can also be measured by counting the number of standard deviations in the distance. If the standard deviation is 2 seconds, the same point is 6/2 or 3 standard deviations away from the mean. This count is denoted by sigma level, Z, also known as Z-score, as shown below.
Z = (x – μ) / σ

Z = (31- 25) / 2 = 3

Specification Limits and Defect Rates

In a process, deviations from the target or mean are accepted to a certain value defined by the specification limits (SL) around the mean. Any value beyond the specification limit indicates a defect or unacceptable result. The farther the specification limits are from the mean, the lower the chance of defects.

A Six Sigma process has a specification limit which is 6 times its sigma (standard deviation) away from its mean. Therefore, a process data point can be 6 standard deviations from the mean and still be acceptable. (See Figure 1.)

Figure 1: Normal Distribution With Mean, Z-score and Six Sigma Specification Limits

In a stable process, the mean naturally shifts as much as 1.5 sigma in the long term on either side of its short-term value. The red lines in Figure 2 (below) show the extreme case of 1.5-sigma mean shift to the right. The right specification limit is at 4.5 sigma from the mean with a defect rate of 3.4 parts per million (PPM). The left specification limit is at 7.5 sigma from the mean with a defect rate of 0 PPM. The overall defect rate, therefore, is 3.4 PPM. A similar argument applies to the extreme case of 1.5-sigma shift to the left. A Six Sigma process is actually 4.5 sigma in the long term, and the 3.4 PPM defect rate is the 1-sided probability of having a data value beyond 4.5 sigma measured from the short-term mean.

Figure 2: Process Mean Shift of 1.5 Sigma and Defect Rate Corresponding to 4.5 Sigma

The 1.5-sigma shift makes defects approach 0 on the opposite side of the shift even at lower sigma levels. The one-sided defect rate is applicable to any capable process with 1-sided or 2-sided SLs, even at a 3-sigma level.

Given the specification limit, SL, the process sigma level, or process Z, is:

Z = (x – μ) / σ = (SL – μ) / σ

In this example, the process sigma level for a specification limit of 31 seconds is:

Z = (SL – μ) / σ

Z  = (31 – 25) / 2 = 3

Therefore, the process is at a 3-sigma quality level. In order to bring the process to the golden Six Sigma quality level, the process sigma would have to be reduced to 1.

Z = (31 – 25) / 1 = 6

In general, the Z formula can be rearranged to calculate the maximum allowable process sigma, or standard deviation, for any sigma level.

Z = (x – μ) / σ

σ = (x – μ ) / Z

For example, given a mean of 25 seconds and SL of 31 seconds, for a Six Sigma quality level, the required process sigma is calculated as:

σ = (31 – 25) / 6 = 1

Similarly, for a 3-sigma quality level, the process sigma must be:

σ = (31 – 25 ) / 3 = 2

Referring back to the short- and long-term behavior of the process mean, there are 2 values for Z, short-term Z, or Zst, and long-term Z, or Zlt.

Zlt = Zst – 1.5

In sigma level calculations, use Zst. A Six Sigma process is 6 sigma in the short term and 4.5 sigma in the long term or:
Zst = 6

Zlt = Zst – 1.5 = 4.5

Clarifying Process Sigma and Sigma Level

Sometimes the term process sigma is used instead of the process sigma level, which may cause confusion. Process sigma indicates the process variation (i.e., standard deviation) and is measured in terms of data units (such as seconds or millimeters), while process sigma count Z, or process sigma level, is a count with no unit of measure.

Process Capability and Six Sigma

Another measure of process quality is process capability, or Cp, which is the specification width (distance between the specification limits) divided by 6 times the standard deviation.

Cp = (Upper SL – Lower SL) / 6σ

The recommended minimum or acceptable value of Cp is 1.33. In terms of Six Sigma, this process capability is equivalent to a sigma level of 4 and long-term defect rate of 6,210 PPM. Process capability for a Six Sigma process is 2.

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Should You Calculate Your Process Sigma?

Many people hear about the Six Sigma quality methodology and immediately want to calculate their own process sigma to determine how close (or far) they are from six sigma. My immediate response to them is twofold: 1. are you currently measuring your process capability?, and 2. are you satisfied with your performance? If the answer to both is yes, then calculating your process sigma may be interesting but not necessary.

When Process Sigma Is Not Neccessary

Let me illustrate with an example. A power company measures their performance in uptime of available power to their grid. Every minute of potential uptime (power is available) is an opportunity, every minute of downtime (power is not available) is a defect in the eyes of a customer. Data is continuously taken, the process capability is measured, and the yield is calculated to be 99.9%. The power company is satisfied with their current performance (but always looking to improve), and the customer’s needs (as collected via Voice of the Customer) are being met.

If the entire company communicates in yield and everyone within the company understands this language, is determining the process sigma level useful? I submit that if the company is pursuing full implementation of the Six Sigma quality methodology across the organization then calculating sigma is appropriate because processes within the organization and between plants can be compared. When a company is only considering Six Sigma for one functional area (power transmission OR bill collection OR call center) then the company might be better suited to maintain the metrics that everyone currently uses and understands. How can an organization communicate if everyone doesn’t learn the language?

I know what you’re thinking, ‘Ok Zack, get on with it. I want to calculate my process sigma anyway. How can I do it?’ Here is your two minute instruction on calculating your process sigma.

How to Calculate Process Sigma

Consider the power company example from the previous page: A power company measures their performance in uptime of available power to their grid. Here is the 5 step process to calculate your process sigma.

Step 1: Define Your Opportunities

An opportunity is the lowest defect noticeable by a customer. This definition, of course, is debatable within the Six Sigma community. Here’s a useful snippet from the forum discussing this point:

“Typically, most products (and services) have more than one opportunity of going wrong. For example, it is estimated than in electronics assembly a diode could have the following opportunities for error: 1) Wrong diode and 2) wrong polarity (inserted backwards), so for each assembly shipped, at least two defect opportunities could be assigned for each diode. Apparently, some manufacturers of large complex equipment with many components prefer to [count two opportunities in this case]. My point is that this approach dilutes Six Sigma metrics.” -Anonymous

Many Six Sigma professionals support the counter point. I always like to think back to the pioneer of Six Sigma, Motorola. They built pagers that did not require testing prior to shipment to the customer. Their process sigma was around six, meaning that only approximately 3.4 pagers out of a million shipped did not function properly when the customer received it. The customer doesn’t care if the diode is backwards or is missing, just that the pager works.

Returning to our power company example, an opportunity was defined as a minute of uptime. That was the lowest (shortest) time period that was noticeable by a customer.

Step 2: Define Your Defects

Defining what a defect is to your customer is not easy either. You need to first communicate with your customer through focus groups, surveys, or other voice of the customer tools. To Motorola pager customers, a defect was defined as a pager that did not function properly.

Returning to our power company example, a defect is defined by the customer as one minute of no power. An additional defect would be noticed for every minute that elapsed where the customer didn’t have power available.

Step 3: Measure Your Opportunities and Defects

Now that you have clear definitions of what an opportunity and defect are, you can measure them. The power company example is relatively straight forward, but sometimes you may need to set up a formal data collection plan and organize the process of data collection. Be sure to read ‘Building a Sound Data Collection Plan‘ to ensure that you gather reliable and statistically valid data.

Returning to our power company example, here is the data we collected:

Opportunities (last year): 525,600 minutes
Defects (last year): 500 minutes

Step 4: Calculate Your Yield

The process yield is calculated by subtracting the total number of defects from the total number of opportunities, dividing by the total number of opportunities, and finally multiplying the result by 100.

Returning to our power company example, the yield would be calculated as: ((525,600 – 500) / 525,600) * 100 = 99.90%

Alternatively, the yield can be calculated for you by using the iSixSigma Process Sigma Calculator – just input your process opportunities and defects.

Step 5: Look Up Process Sigma

The final step (if not using the iSixSigma Process Sigma Calculator) is to look up your sigma on a sigma conversion table, using your process yield calculated in Step 4.

Assumptions

No analysis would be complete without properly noting the assumptions that you have made. In the above analysis, we have assumed that the standard sigma shift of 1.5 is appropriate (the calculator allows you to specify another value), the data is normally distributed, and the process is stable. In addition, the calculations are made with using one-tail values of the normal distribution.

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What is a Project Plan?

It’s a question that comes up often, and doesn’t seem to have a clear answer. Is a project plan simply an MS Project schedule? Is it a summary document of just a few pages? Or a more in-depth and detailed document containing specifics of every aspect of the project?

As you might imagine, it’s tough to write one if you don’t know exactly what’s expected.

Project Plan Basics

At its most basic level, a project plan – or Project Management Plan, as the Project Management Body of Knowledge (PMBOK) calls it – is simply a guide for how the project will be managed. Think of it as the project manager’s rulebook. It provides a structure for handling things like changes to the project, communication methods and requirements, and approval processes. It also provides a baseline for the project including cost, scope, and schedule.

When creating a project plan, you have some flexibility regarding the level of detail to include, as long as your plan defines how the project will be planned, executed, monitored and controlled, and closed. It should focus mainly on management processes, while detailing the tools and techniques necessary to meet the needs of that specific project, and may include any subsidiary management plans or other related documents. This formal document typically requires approval from the project sponsor or other stakeholders.

It’s important to remember that a project management plan is a living document. It can and should be frequently updated throughout the life cycle of the project. As you do so, be sure to have all changes approved by the project sponsor and any others as defined in the project plan itself.

Getting Started with a Project Plan

Ideally, a project plan is created after the Project Charter has been signed. It is developed during the planning phase and is an output of the PMBOK Planning Process Group. At a minimum, it should include details about:

◉ The project management processes for the entire life cycle of the project.
◉ The level of implementation of each process.
◉ The tools and techniques to be used to support the project management process.
◉ How the work will be executed in order to accomplish your project's objectives.
◉ How changes will be managed, monitored and controlled.
◉ How configuration management will be performed throughout the project's life cycle.
◉ How performance measurement baselines will be maintained.
◉ How communications will be performed, including needs for communications and techniques for communication.
◉ The process for management review.

In addition, project baselines are an important component of any good project plan. Yours should include schedule, cost performance, and scope baselines at a minimum, and others as deemed necessary by the project manager.

Subsidiary Management Plans

Project plans often include support documents called subsidiary management plans. Like a project plan, these can be developed at either a summary or detailed level, depending on the requirements of the project. It’s the job of the project management plan to integrate and consolidate all of the subsidiary plans, either as sections of the overall project plan or as appendices to the project plan. Typically, if the subsidiary management plan is a summary, it’s included as a section of the project management plan. More detailed and in-depth plans should be added as an appendix.

Typically, a project plan should at a minimum contain the following subsidiary management plans:

◉ Communications Management Plan
◉ Cost Management Plan
◉ Human Resource Plan
◉ Process Improvement Plan
◉ Procurement Management Plan
◉ Quality Management Plan
◉ Requirements Management Plan
◉ Risk Management Plan
◉ Schedule Management Plan
◉ Scope Management Plan

Project Documents

Other documentation is often included as a part of a project plan to support the development of the project plan and the management of the project. The PMBOK has broken these documents out from the project management plan in order to differentiate them from the project plan and its subsidiary management plans. Some examples of typical project documents are:

◉ Activity Cost Estimates
◉ Assumption Log
◉ Change Log
◉ Contracts
◉ Performance Reports
◉ Proposals
◉ Quality Checklists
◉ Resource Calendars
◉ Teaming Agreements

A project management plan is a living document and is often updated throughout the lifecycle of the project. Be sure to keep the project management plan updated throughout the life of the project and have all changes approved by the Project Sponsor and any other approvals as defined in the project plan.

It’s clear that a project management plan can take many forms, from a simple summary to a complex document detailing every aspect of your project. Because of the wide variety of formats available, it’s often best to start your project plan with a template. You can include the sections that fit your needs, remove what’s unnecessary, and edit the details to match your unique project.

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Project Scope Management

A Scope Management processes determines what work is required to be done and ensure that the project includes only that work to complete the project.

Why managers need Project Scope Management

◉ Without determining the project scope, the time or cost that the project will take up cannot be estimated
◉ Scope management builds control processes to address elements that may alter project during the project life-cycle
◉ It helps to avoid the challenges that a project might encounter with every growing scope and unruly requirement list.

This stage includes both-

◉ Managing Project scope
◉ Managing Product scope

Project Scope Management Process include following activities.

Process	Project Group	Key deliverables
Plan Scope Management	Planning
Collect Requirements	Planning	Required document
Define Scope	Planning	Project scope statement
Create WBS	Planning	WBS directory, WBS
Validate Scope	Monitoring and Controlling	Acceptance deliverables
Control Scope	Monitoring and Controlling	Change request

We will see this all process step by step below:-

Plan Scope Management

The Scope Management plan will determine how the scope will be defined, validated and controlled.

Primary Inputs	Tools and Techniques	Primary Outputs
Preliminary Project Scope Statement
Project charter	Meetings	Requirements management plans
Project Management Plan	Expert Jugment	Scope Management Plans
Enterprise environmental factors
Organizational Process Assets

Collect Requirements

During this process managers use various techniques and tools for the collection of the project requirements from the stakeholders. This stage is very important and if done accurately the chances of error during the project will be minimal.

Primary Inputs	Tools and Techniques	Primary Outputs
Project Charter	Interviews	Requirement documentation
Stakeholder register	Focus groups	Requirement management plan
	Group creativity techniques	Requirements traceability matrix
	Facilitated workshops
	surveys and Questionaires
	Prototypes
	Observations
	Group decision-making techniques

Defining Scope Process

This process clearly indicates how the project is supposed to progress and what it cannot do. During this process it is ensured that the project remains on the track by reviewing the supporting documents. The resulting scope will then mention the stakeholder's requirements and expectations.

Primary Inputs	Tools and Techniques
Project charter	Expert Judgment
Requirements documentation	Product analysis
Organizational Process Assets	Alternative identification
	Facilitated workshops

Creating WBS (Work Breakdown Structure)

The WBS enables the project manager and his team to break down a high level project deliverables into a smaller, manageable units of work called work packages.

Primary Inputs	Tools and Techniques	Primary Outputs
Project Scope statement	Decomposition	WBS
Requirements documentation		WBS dictionary
Organizational Process Assets		Scope baseline
		Project document updates

Validate Scope

The validate scope process involves clients acceptance. It is when the client formally accepts all the project deliverables. At the end of each phase this process occurs. During this process, the client gives their feedback on the work that was performed.

Primary Inputs	Tools and Techniques	Primary Outputs
Project Scope Statement	Inspection	Acceptance Deliverables
Project Management Plan		Change request
Requirement Traceability Matrix		Project document updates
Validated deliverables

Scope Control

This process or phase involves the monitoring of the project status and managing of the scope changes. Apart from this, it also involves assessing of the additional requirements by the customer or proactively overlooking the project scope.

Primary Inputs	Tools and Techniques	Primary Outputs
Project Management Plan	Variance analysis	Work performance measurements
Requirements documentation		Change requests
Requirement traceability matrix
Organizational process assets
Work performance information		Project document updates

Key points to remember for Scope Management

◉ To avoid cost overrun and schedule slips, the scope needs to be complete and accurate.

◉ Scope needs to be clearly defined to avoid unnecessary work and confusion

◉ Scope document should be shared with all stakeholders to avoid error in design and requirement

◉ The good practice for Scope Management is that the scope document must remain unaltered for the duration of project.

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Introduction to PMP and Certification

A project is a temporary endeavor undertaken to create a unique product, service or result. A project is defined as temporary because it has a defined beginning and end time, and it is unique because it has a particular set of operations designed to accomplish a goal.

The primary characteristics of a project are

◉ It has a definite start and end point
◉ Once the end point is reached, the project is over
◉ It is attempting to achieve something new
◉ Project must meet the customer or stakeholder requirements

While, the project management is the discipline of planning, organizing, motivating and controlling resources to achieve specific goals. The main challenge of project management is to achieve project goals and objectives while keeping in mind the project scope, time, quality and cost.

Project management actually began in the early 1950s. The need for project management arised observing the benefit of organizing work within the project and critical need to co-ordinate across different departments and professionals.

Project management mainly deals with these ten areas

◉ Integration
◉ Cost
◉ Human resources
◉ Stakeholder management
◉ Scope
◉ Quality
◉ Communications
◉ Time
◉ Procurement
◉ Risk Management

While preparing project, look project into these three perspectives, it helps to give much better understanding of the whole process

◉ How does project fit into the organization?
◉ How the project will evolve over time?
◉ What skills are required to manage the project successfully?

There are various methodologies that are available for project management like Prince2, Agile, Six Sigma, etc. which we will look into in a later part of the tutorial. Various tools are available to track project tasks and measure accomplishments during the project. These includes Gantt charts, PERT charts and Work down structures.

Certification for Project Management

The popular project management certifications are PMP and PRINCE2, which is acknowledged all over the world.

What is PMP Certification?

Project Management Professional (PMP) is a certification administered by Project Management Institute, U.S.A. It is a project management course recognized all over the world. PMBOK-fifth edition is the latest version for this exam. The certification is valid for 3 years.

Pre-requisite

Pre-requisite for PMI-PMP examination includes

1. Four-year bachelor degree
2. A minimum of 4500 hours of project management experience

OR

3. A secondary degree (high school diploma, associate degree, etc.)
4. A minimum of 7500 hours of project management in last five years

AND

5. 35 hours of project management education from a registered education provider (REP)

Fee Structures

◉ Fee Structure to earn 35 PDUs vary from country to country, it may vary from $300 to $5000
◉ Fee structure for computer-based Testing (CBT)
     ◉ For PMI members $405.00
     ◉ For non-PMI members $555.00
◉ Re-examination Fees
     ◉ For PMI members $275.00
     ◉ For non-PMI members $375.00

Exam Structure

◉ To clear the exam, you need to pass a multiple choice examination
◉ You need to answer 200 questions in 4 hours time for domain mentioned below
◉ The exam is available in 13 different languages globally.

It will assess the candidate management knowledge in the following five domains. The weightage of questions for each domain include

Project Management Area	Percentage of Questions
Initiating the project	13
Planning the project	24
Executing the project	30
Monitoring and Controlling the project	25
Closing the project	8

There are other various courses available related to project management on PMI like PgMP, PfMP, CAPM, etc.

The code of conducts and ethic defines:

◉ Responsibility to the profession

◉ Responsibility to customers and the public

Code of Ethics and professional conduct includes

PMP Professional Responsibility

◉ Maintain high standards of professional conduct and integrity

◉ Encourage others in the profession to act in a professional manner

◉ Continuously seek guidance to enhance the professional capabilities

◉ Upholding the code

◉ Compliance with all mandatory rules and regulations

◉ Be responsible for your actions

◉ Practice code of ethics with fairness and honesty

◉ Stick to ethical standards and legal requirements

◉ Protect stakeholder and balance stakeholders interest on the project

◉ Make sure that a conflict of interest doesn't compromise the customer's legitimate interest

◉ Maintain confidential information

◉ Act in an accurate, truthful manner

◉ Reporting illegal or unethical behavior

◉ While dealing with other cultures maintain professional sensitivity

◉ Be aware of cultural differences

Other professional responsibility

◉ Project manager needs to ensure that company policies are followed

◉ Copyright laws are not violated

◉ Budget tampering- do not present anything besides your original estimate

◉ Rights- do not do business with a country where there is a clear violation of the fundamental rights

Code of conducts and ethic sample questions for PMP professionals;

1. After a person is hired, he presents ideas which were developed by a competitor company already. 2. Are you going to use the same ideas?

As a manager what would you do resolve the conflict between team members?

3. You are a project manager, and a large and unexpected problem occurs that will cause a delay in the schedule. What should you do?

PRINCE 2

If you are in the Western Europe, Prince 2 is a good alternative to PMP. It is the de-facto standard for project management in the UK and is practiced worldwide. Prince2 have certification for various level prince2 foundation, prince2 foundation & practitioner, and prince2 practitioner. Courses and Exams for prince2 certification are available online.

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Project Cost Management & Estimatiaon Guide

Creating a project budget is an extremely crucial part of any project management. Various things are taken in consideration while calculating budget for project like labor costs, necessary equipment acquisition, material costs, etc.

Project Cost Management

Project Cost Management is the process of planning and controlling the project cost effectively. It defines what costs are required for each deliverable. The cost of the project can be estimated from various process sources like

◉ Creating WBS
◉ Develop Schedule
◉ Plan human resources
◉ Identifying risks

The inputs of cost management include,

◉ Project management plan
◉ Project charter
◉ Enterprise environmental factors
◉ Organizational process assets

While, the output of this is

◉ Cost Management Plan.

Project Cost Estimation

The Project Cost Estimation is the process of approximating the total expenditure of the project.

The accuracy of the cost estimation depends on the accuracy and details of the project scope, which is the scope baseline. The scope will also define any constraints like date, resources or budget.

The risk register will help to estimate types of costs, the expenses made behind the contingent action and the expenses made to cope with risks.

To estimate the cost of project you have to categorize various cost types into categories like

◉ Labor cost
◉ Equipment cost
◉ Cost of supplies
◉ Travel cost
◉ Training cost
◉ Overhead cost, etc.

Techniques used to estimate project cost

To estimate project cost formally there are few techniques used

Analogous Estimating

This estimating technique is based on expert judgments and information based on similar previous projects. Where previously done similar project cost is considered with plus or minus of 20% for existing project.

Parametric estimating

Past data or record is used to estimate cost for the current project.

Bottom-up estimating

Once you have defined the scope of the project, it is the most reliable form of technique. In this technique, based on WBS, you estimate the cost for each resource or deliverables.

Likewise, there are other techniques which could be useful for estimating cost like PERT estimating, vendor bid analysis, etc.

Project Budget Planning

The main purpose of this activity is to allocate and authorize the monetary resources required to complete the project. The main output for determining the budget includes cost performance baseline. It not only specifies what cost will be incurred but also when costs will be incurred. The inputs for determining budget includes

◉ Activity cost estimates
◉ Basis for estimates
◉ Scope baseline
◉ Project Schedule
◉ Resource calendars
◉ Contracts
◉ Organizational process assets

The output of this process is

◉ Cost performance baseline
◉ Project funding requirements
◉ Project document updates

The project budgeting is performed in parallel with the project scheduling process. It is highly dependent on three component -

◉ Cost estimation
◉ Task durations
◉ Allocated resources

During project budgeting, project manager communicates with different people responsible for managing the work efforts as well as estimating project costs.

He will use various project prospects like work breakdown structure of the project, the cost estimates, historical data and records, resource information, and policies.

Without risk assessment, the budgeting process is not completed. Risk assessing process considers factors like time shortage, availability of resources, development team experience, the technology used, etc. The risk assessment can be an amount between 25 and 30 percent of the overall project cost.

Project Quality Management Plan

The quality management process group consists of three processes,

1. Plan Quality

Plan Quality process involves identifying which standard quality are relevant to the project and how to fulfill them. It also includes identifying quality metrics and standard measures for project processes, regulatory compliance requirements, product functionality, documentation, etc.

The inputs of the plan quality management includes

◉ Project management plan
◉ Stakeholder register
◉ Risk register
◉ Requirements documentation
◉ Enterprise environmental factors
◉ Organizational process assets

The output for the quality management is

◉ Quality management plan
◉ Process improvement plan
◉ Quality metrics
◉ Quality checklists
◉ Project documents updates

2. Quality Assurance

This stage includes mainly two activity, first analyzing project quality and improve project quality. It is a process of auditing the quality requirements and the results from quality control measurement to ensure that quality standard is maintained throughout the process. The input for this will be same as the output of plan quality management while the

The output of this process will be

◉ Change request
◉ Project management plan
◉ Project documents updates
◉ Organization process assets updates

3. Quality Control

This will be conducted to control quality throughout the project life cycle. It defines how the quality standard can comply with the defined quality standards. The output of Quality Assurance will be the input for Quality Control. While the output will

◉ Quality control measurements
◉ Validate changes
◉ Verified deliverables
◉ Work performance information
◉ Change request
◉ Project management plan
◉ Project documents updates
◉ Organizational process assets updates

Project Human Resource Management

HR management includes the process of organizing, managing and leading the project team. It is comprised of the people with allocated roles and responsibilities for completing the project. The HR management will deal with four processes.

1. Develop human resource plan: This stage defines the project roles and responsibilities, project organization charts and staff management plan
The input for this will

◉ Project management plan
◉ Activity resource requirements
◉ Enterprise environmental factors
◉ Organizational process assets

The output for this will be

◉ Human resource management plan

2. Acquire project team:

This stage confirms the availability of the human resource and obtaining the team necessary to complete project activities. The input for this stage would be the output from the previous step. While the output of this stage would be

◉ Project staff assignments
◉ Resource calendars
◉ Project management plan updates

3. Develop project team:

In this stage, the focus is improving the team efficiency, team member interaction and enhancing overall team and project performance. The input for this stage would be the output from the previous step. While the output for this stage would be

◉ Team performance assessments
◉ Enterprise environmental factors updates

4. Manage project team:

This process includes tracking team member performance, resolving issues, providing feedback and managing a team to optimize project performance. The input for this stage would be the output from the previous step. While the output for this stage would be

◉ Change request
◉ Project management plan updates
◉ Project document updates
◉ Enterprise environmental factors updates
◉ Organizational process assets updates

Project Communication Management

Here, Project Communication does not mean interacting verbally with each other, but transmitting project related information effectively with the project team, stakeholder, project managers, etc. It should address risk actions and assessments, project plans, meeting management and actions, reviews and walk-throughs, etc.

This segment cover mainly five areas

1. Communicating with Stakeholders

It is the process of developing an approach to communicate with stakeholders efficiently and understanding their requirements. The input for this would be

◉ Project management plan
◉ Stakeholder register
◉ Enterprise environmental factors
◉ Organizational process assets

While the output for this will be

◉ Communication management plan
◉ Project documents updates

2. Manage Communications

It is the process of storing, distributing, collecting, and retrieving of project information in accordance with a communication plan. The input of this stage would be

◉ Enterprise environmental factors
◉ Organizational process assets
◉ Work performance reports
◉ Communication management plan

While the output would be

◉ Project communications
◉ Project management plan updates
◉ Project documents updates
◉ Organizational process assets updates

3. Control Communications

It is the process of controlling and monitoring communication throughout the entire project lifecycle. The input for this stage would be

◉ Project management plan
◉ Project communications
◉ Issue log
◉ Work performance data
◉ Organizational process assets

While the output of this stage would be

◉ Work performance information
◉ Change requests
◉ Project management plan updates
◉ Project document updates
◉ Organizational process updates

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ITIL V2 vs ITIL V3: What’s the Difference?

ITIL stands for Information Technology Infrastructure Library. It is a set of proven IT processes and common practices for IT Service Management (ITSM). ITIL V2 and ITIL V3 are standards in the field of ITSM. V3 builds on the operational excellence concepts of V2, and boosts service management towards a more holistic approach.

ITIL V3 services and processes

Key differences between V2 and V3 versions

ITIL V2	ITIL V3
Heavily process-oriented	More service-oriented (Lifecycle approach to service management)
More about linear process flow from business to infrastructure	Offers a hub-and-spoke structure that adds flexibility
Includes around 700 pages of key publications	Includes around 1,400 pages in 5 key publications of service lifecycle (service strategy, service design, service transition, service operation, and continual service improvement)
Positioned around support and delivery of IT Services	Focuses on the full lifecycle of services, covering the entire IT firm
Offers little help to ITSM people to clearly articulate the benefits of professional service management	Clearly defines the roles and responsibilities, and reasons the role of communication in the entire lifecycle
Aims towards the “What” question—suggesting “What should be done to improve processes”	Takes care of the “How” question—explaining “How we should go about doing it”

Let’s explore the differences in each phase

1. Service strategy

The service strategy volume offers guidance on the design, development and implementation of service management.

◈ Service portfolio management

ITIL V2 discusses service level management. Service portfolio management is a new concept in V3. V3 introduces strategic thinking about how the service portfolio should be developed in the future.

◈ Demand management

ITIL V2 discusses demand management concepts within the context of capacity management. V3 introduces the process of demand management as a distinct process and as a strategic component of service management.

◈ Financial management

Activities of financial management are similar in both ITIL V2 and V3. However, in ITIL V2, financial management was part of service delivery.

2. Service design

Service design provides guidance for the design and development of services.

◈ Service catalogue management

In ITIL V2, the service level management process has mentioned the concept of a service catalogue. But there was no process outlined for its creation and maintenance. V3 introduces a dedicated process to make sure that the service catalogue is up to date and contains reliable information.

◈ Information security management

ITIL V2 provides guidance on information security management in a separate book. In V3, security management is a part of service design.

◈ Supplier management

In ITIL V2, supplier management was covered under ICT infrastructure management. In V3, it is part of the service design process.

◈ Service level management

No differences between V2 and V3.

◈ Capacity management

No differences between V2 and V3.

◈ Availability management

No differences between V2 and V3.

◈ IT service continuity management

No differences between V2 and V3.

3. Service transition

Service transition builds and deploys new or modified services.

◈ Transition planning and support

V2 covers few aspects of this process under release management, but V3 offers considerably enhanced guidance. Transition planning and support in V3 is all about managing transition projects.

◈ Evaluation

In ITIL V2, evaluation was discussed implicitly as part of various processes. In V3, evaluation has been made a process itself.

◈ Service validation and testing

ITIL V2 covered some aspects of release testing under release management; V3 provides significantly enhanced guidance.

◈ Knowledge management

Many knowledge management aspects were covered in ITIL V2. In V3, it has been added as a new independent process that provides knowledge to all ITSM processes.

◈ Change management

The activities are identical in V2 and V3.

◈ Release and deployment management

The activities in V3 are similar to those in V2.

◈ Service asset and configuration management

No differences between V2 and V3.

4. Service operation

Service operation embodies practices in the management of service operations.

◈ Event management

In ITIL V2, event management was covered under incident management. ITIL V3 sees event management as an important trigger of the incident and problem management processes. Hence it has been made a standalone process for detecting and managing events and alarms.

◈ Request fulfillment

In ITIL V2, this process was covered under incident management, and in V3, it is added as a new process.

◈ Access management

Access management was added as a new process to ITIL V3—as a consequence of IT security concerns.

◈ Incident management

No differences between V2 and V3.

◈ Problem management

Activities of this process are identical in V2 and V3.

◈ Technical management

Technical management is a new function added to ITIL V3. The role of the technical management function is to provide technical expertise and overall management of the IT infrastructure.

◈ IT operations management

This is a new function added to ITIL V3. Its focus is on the day-to-day, short-term activities required to operate and support IT services.

◈ Application management

Application management is a new function added to ITIL V3—to support and maintain operational applications that support an organization’s business processes.

◈ Service desk

No differences between ITIL V2 and V3—includes descriptions of all types, best practices, and roles and responsibilities related to a service desk.

5. Continual Service Improvement (CSI)

The CSI combines principles, practices and methods from quality management, change management and capability improvement.

◈ Service measurement and service reporting

In ITIL V2, these processes were described under service level management process. V3 introduces dedicated processes for service and process evaluation. It expands this into CSI, and structures a 7 step process as listed below:

1. Define what you can measure
2. Define what you should measure
3. Gather the data
4. Process the data
5. Analyze the data
6. Present and use the data
7. Implement the corrective action

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What is ITIL V3?

ITIL is a framework consisting of best practices and processes that can be adopted in order to provide IT service management (ITSM). Since its first publication in the 1980s, ITIL has become one of the most widely used framework by organizations to provide ITSM. The framework places importance on improving customer satisfaction by providing effective service delivery while being cost effective.

Over the years, the different versions of ITIL have released in order to stay aligned with changing business requirements. Termed ITIL V3 the third version of ITIL best practices framework was released in 2007. An update to ITIL V3 was made in 2011, because of which, ITIL V3 is also called ITIL 2011 V3. This latest version is more suited for today’s business environment because it includes strategic elements so that the IT service management is more aligned to the business requirements.

ITIL V3 Fundamentals

ITIL V3 Incident management

In today’s business environment, it is imperative to ensure the business operations are conducted seamlessly without any hurdle. In case of an unexpected disruption to a service within the organization, productivity gets compromised. ITIL V3 Incident Management process adopts a set of best practices for effective incident handling and incident resolution to ensure smooth business operations with minimal or no downtime.

ITIL V3 Change management

Change is inevitable in every organization; technologies continually change and have to be replaced, existing solutions/applications have to be upgraded, etc. ITIL V3 provides a set of best practices termed Change Management to handle, prioritize and roll out changes efficiently. By utilizing change management effectively, downtime can be avoided.

ITIL V3 Problem management

The Problem Management team is responsible to perform a Root Cause Analysis (RCA) and to find a permanent fix/workaround for recurring incidents. It is recommended to have an effective communication strategy and to follow a proactive approach to avoid any major incident occurrence. Problem is one or more incidents with an unknown root cause. Problem management maintains a known error database, KEDB whose solution is unknown.

ITIL V3 Framework

ITIL V3 comprises of five sections- service strategy, service design, service transition, service operation and continual service improvement. Let us take a look at what each of this section comprises.

◈ Strategy Generation
◈ Financial management
◈ Demand management
◈ Service Portfolio management
◈ Migrate data in one click

ITIL Service Design

In this section, the design of the IT service comprising architectures, processes, policies and documentation are determined to address the business requirement of the organization. Service Design includes seven processes:

◈ Service Catalog Management
◈ Service Level Management
◈ Availability Management
◈ Capacity Management
◈ IT service Continuity Management
◈ Information Security Management
◈ Supplier Management

ITIL Service Transition

ITIL Service Transition stage ensures that the current state of service is not compromised when an organizational change is deployed. Service Transition includes seven processes:

◈ Transition Planning and Support
◈ Change Management
◈ Service Asset and Configuration Management
◈ Release and Deployment Management
◈ Service Validation and Testing
◈ Evaluation
◈ Knowledge Management

ITIL Service Operation

ITIL Service Operation is crucial to ensure the businesses meet customer requirements. This stage comprises of processes and functions to ensure seamlessly flow of everyday operational tasks, monitoring infrastructure and related services. Service Operation includes five processes:

◈ Event Management
◈ Incident Management
◈ Request Fulfillment
◈ Problem Management
◈ Access Management

ITIL Continual Service Improvement

In the ITIL continual service improvement stage, rigorous quality checks are conducted to ensure the service process is improved consistently. Continual Service Improvement includes three processes:

◈ The 7 improvement process
◈ Service Measurement
◈ Service Reporting

ITIL V3 Certification

Over the years, the popularity of ITIL V3 has increased significantly; it has become one of the widely used methodology to ensure a seamless flow of ITSM process. ITIL V3’s wide acceptance globally and its popularity has made ITIL V3 certification one of the most coveted certification in the IT industry. As mentioned above, ITIL V3 is more aligned to the business requirements of today and ITIL V3 certification can be achieved after completing five levels:

Foundation Level

This is the entry level certification that provides the candidate taking the certification with a general background on the fundamental terminology and concepts in ITIL service lifecycle, interaction between the different lifecycle stages and the processes adopted for ITSM.

Practitioner Level

The second stage in the ITIL certification level is the Practitioner level. This level will equip the candidate taking the ITIL certification with capabilities to adopt and sustain ITIL.

Intermediate Level

IT industry recognized qualification level is the Intermediate level where module level focus in provided on IT service management.

Expert Level

Candidates completing the Expert level certification will be able to showcase superior ITIL V3 best practices skills and possess a detailed and in depth knowledge on the entire ITIL V3 process.

Master Level

Candidates vying to complete the Master level in ITIL V3 certification should aptly demonstrate their knowledge on ITIL V3 and provide supporting documentation including successes achieved in practical assignments where ITIL V3 was implemented for IT service management.

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