1 PMP PREP QUICK STUDY GUIDE BY THE PERSIMMON GROUP
2 Frequently Asked Questions What is the PMP credential? The PMP (Project Management Professional) credential is a globally recognized certification for project managers. It is awarded by PMI (Project Management Institute), a not-for-profit professional membership association for the project management profession. The PMP is one way to demonstrate to potential employers that you have the experience, education and competency needed to lead projects. Is the PMP just for Project Managers? No. PMI defines a project as a temporary group activity designed to produce a unique product, service, or result. In other words, project management is the art and science of doing something that has never been done before. Given this definition, you can understand why project managers are in such high demand! You don t have to be a titled project manager to benefit from learning to manage projects, and the PMP certification is increasingly valued across many professions and occupations. In fact, many of today s project managers were accidental people with technical expertise in another area who gradually developed a reputation for successfully leading projects within their department. If this describes you, you may benefit from formal training and certification in project management! Will the PMP help me get a raise? It might. The impact of obtaining a PMP on salary varies by industry. PMI publishes an annual salary survey that reports data on project manager salaries across many industries, regions, education, and experience levels. The 2014 survey revealed that the mean salary for project managers who earned the PMP within the last year is about $4,000 more than those without the certification, while those who earned the PMP within the last five years make about $15,000 more than those who are not certified. IT is also important to note that certification is increasingly being listed as a preferred or even required item for project management job postings so the PMP might also afford you more employment choices in the long term. Do I have to have project management experience to get the PMP? Yes. Experience is one very important aspect of certification. It is one thing to learn the discipline academically, and another to apply project management principles to the real world. However, note that any time you spend doing projects count as experience even if you didn t have the title of Project Manager at the time. The amount of experience you need varies depending on your educational background:
3 Educational Background Project Management Experience (In Years) Project Management Experience (In Hours) High school diploma or Five years 7500 hours Associate degree Four year degree or higher Three years 4500 hours It is important to note that you must have BOTH the requisite years and hours of experience. In other words: If you worked 80 hour weeks for one year, that still counts as just one year of experience. If you worked 80 hour weeks for one year, all of those hours do count toward your hours of experience. In the above example, it is possible to hit your total needed hours before you hit the requisite number of years of experience. Your years of experience do not have to be consecutive, but they do have to have been with the last eight years of today s month. For example, if the month is December 2015, you can record project management experience dating back to December Do I have to have a college degree to get the PMP? No, but having a four year degree lessens the number of hours of experience needed to qualify for the PMP credential. Your degree does not have to be in project management. Do I have to take an exam to get the PMP? Yes. After you ve submitted your application, which includes documentation of your experience and education plus any audit paperwork requested, you ll be cleared to sit for the exam. The exam is offered daily at Prometric testing centers throughout the country. You must make a 61% of higher to pass the exam. However, you will not be told your score after you complete the exam. Instead, you will be given two levels of results. The first level simply indicates whether you passed the exam. The second level rates you as proficient, moderately proficient, or below proficient in each domain of project management. Note that even if you score below proficient in one of the domains, you can still pass the test. What is the PMP exam like? Each test is 200 multiple choice questions, and you ll have four hours to answer them. 25 of those questions are experimental, and don t count towards your score. Unfortunately you won t know which 25 questions will be discarded, and they are placed randomly throughout the exam. Each question will have four choices, and it s often the case that all four answers are correct. You re looking for the most correct response the right thing to do at the right time in the right way. This is why reading the PMBOK Guide is usually not sufficient to pass the test. Answering questions takes practice, practice, practice!
4 In terms of content, most of the test questions come from the PMBOK Guide. PMBOK stands for Project Management Body f Knowledge, and the guide is PMI s best attempt to summarize all of the ideas, concepts, terms, and best practices used by project managers around the world. It breaks project management down into five process groups (Initiation, Planning, Execution, Monitoring/Controlling, and Closing) and ten knowledge areas (Integration, Scope, Schedule, Cost, Risk, Quality, Human Resources, Communication, Stakeholder, and Procurement Management.) While PMI does not provide data on how many questions come from each knowledge area, we do know how many questions come from each of the five process groups: Initiation 13% Planning 24% Executing 30% Monitoring/Controlling 25% Closing 8% Although most questions are taken from content in the PMBOK Guide, PMI reserves the right to pull questions from outside reading as well. For example, some of the content is derived from the PMI ereads and Reference library made available electronically to members. For a complete guide to the PMP exam content, PMI has published an Examination Content Outline. Do I have to have any project management classroom hours to get the PMP? Yes. Before you can qualify to take the exam, you must document 35 contact hours of project management instruction. Courses offered by your employer or training companies can count toward this total, but they are not pre-approved by PMI. To ensure your hours count, it s a good idea to get your training from a Registered Education Provider (R.E.P.) or your local PMI chapter. You can also obtain you 35 hours online, so long as the training is offered by an R.E.P. Keep in mind, however, that regular PMI chapter meetings do not count toward your goal. Later, after you obtain your credential, you ll need to accrue PDUs. PDUs can come from a range of sources, not just classroom instruction. For example, volunteering at your local chapter can help you accrue PDUs. What do I need to know about the PMP application process? The application process can be completed online. Once you register for an account, the website will guide you through the application process. You ll need to submit your application, including documentation of your education, experience, and training, before registering to take the test. For PMI members, the cost to take the computerized test is $ For non-members, the cost is $ It is prudent to become a PMI member before registering for the test; the discount makes up for the cost of membership, and membership affords you access to free electronic copies of the PMBOK Guide, the Salary Report, and the entire ereads and Reference library. Joining your local chapter usually requires paying an additional small annual fee. You can become a PMI global member without joining your local chapter.
5 The Application Process Step 1: Gather Materials Before completing your application, it s a good idea to have the following items handy: Documentation of your 35 hours of project management training from a Registered Education Provider (R.E.P.) Copy of your diploma for the highest degree you ve attained Names and contact information for references who can validate the hours and years of experience you submit in your application. Step 2: Complete the Online Application The easiest way to complete the application process is online, using PMI s online certification system. Once you ve started the application, you have 90 days to complete it before you must start over again. Once you ve submitted your application, you can keep coming back to the system to check on your application status. The online application will ask you to enter the source of your 35 contact hours, the institutions and years in which you obtained your education, and all of your years and hours of experience. You will enter your years of experience as date ranges (for example: Aug 2011 to Jun 2012, Oct 2012 to Oct 2014, etc.). You will enter your project management hours by project. For each project, you ll be asked to write a description of your role, a summary of the project, and the name of your supervisor/manager (or someone who, if audited, can vouch for your involvement on the project.) You ll also be asked to list the number of hours spent in each process group of the project. For example: Project Initiation Planning Execution Monitoring/Controlling Closing Name Project A Keep the following in mind: Your years of experience do not have to be consecutive. One year of working 80 hour weeks still counts as just one year. You do not need to have hours in every process group. Your 35 contact hours are different from the PDUs that you ll need to obtain to maintain your PMP credential. In other words, the 35 hours you used to obtain your PMP cannot then count towards the PDUs needed to maintain certification.
6 Step 3: Wait for Confirmation of Receipt and Completeness of Application Once you ve submitted your application, PMI will review it for completeness. This could take up to five business days. Continue checking the site for updated status information about your application. Step 4: Submit Payment Once your application has been processed, PMI will request payment. This can be done online. Step 5.1: Wait for Confirmation of Acceptance of Application After submitting payment, PMI will review your application for content. After this stage of review, you may be flagged for an audit. You should know if you ve been audited within seven business days. If you are not audited, you will be notified and prompted to register for the test. Step 5.2: If You Are Audited You will have 90 days to submit your audit materials, which include copies of your diploma and any certificates you earned when you obtained your 35 contact hours. PMI will also provide you with a downloadable form that you ll need to print and give to your references. After completing the form, your references will need to either send directly to PMI or give to you in a sealed envelope so that you can submit to PMI with the rest of your materials. If for some reason you do not pass the audit, PMI will refund your money (less a $100 processing fee.) Step 6: Take the Exam! The computerized test is offered at Prometric sites across the country. There are no scheduled breaks during the four-hour exam, but you may leave at any time to take a break. Keep in mind, however, that the clock will still be ticking while you re in the bathroom! You ll need to bring a form of ID with you that includes your signature, a photograph, and the English language (or translation to English). You won t be able to bring calculators or scrap paper to the exam, but both will be provided to you upon arrival. The calculator is built into the computerized exam tools. You will receive your score immediately after completing the exam. Your score will be presented to you as a Pass or Fail designation; you will not know the percentage of questions you answered correctly on the exam. You are allowed to take the test three times within one year. If you fail all three times you must wait one year before making another attempt.
7 Study Guide: Math Concepts Term Expansion Interpretation PV Present Value The value today of future cash flows. NPV Net Present Value The present value of the total benefits minus the costs over many time periods. IRR Internal Rate of Return The rate of growth a project is expected to generate. Higher is better. PV EV Planned Value (Budgeted Cost of Work Scheduled) Earned Value (Budgeted Cost of Work Performed) As of today, What is the estimated value of the work planned to be done? How much work (value) was expected to be finished at this point of time? As of today, What is the estimated value of the work actually accomplished? How much work (value) has actually been completed at this point of time? As of today, What is the actual cost incurred for the work accomplished? AC Actual Cost (Actual Cost of Work Performed) BAC Budget At Completion How much did we BUDGET for the TOTAL project effort? CV Cost Variance How much more/less has the completed work cost compared to what was planned? SV Schedule Variance How much more/less work has been accomplished compared to what was planned? CPI Cost Performance Index How much is the work being completed costing compared to what was planned? Know whether over or under budget? SPI Schedule Performance Index How does the work being completed compare to what was planned in the schedule? Know if ahead or behind schedule? EAC Estimate At Completion What do we currently expect the TOTAL project (at completion) to cost (a forecast)? ETC Estimate To Complete From now on, how much MORE money will it take to finish the project (a forecast)?
8 VAC Variance At Completion As of today, How much over or under budget (will the total project cost be?) do we expect to be at the end of the project? Study Guide: Formulas Term Formula Notes PV FV FV = future value (1 + r) n r= interest rate N = number of time periods CV EV AC NEGATIVE is over budget, POSITIVE is under budget. At end of project, CV = BAC AC SV EV PV NEGATIVE is behind schedule, POSITIVE is ahead of schedule. If a project finishes, SV should be 0 at the end of the project. CPI EV / AC Efficiency in usage of funds. We are getting $ worth of work out of every $1 spent. CPI > 1, Efficiency in utilizing the resources is good CPI < 1, Efficiency in utilizing the resources is bad SPI EV / PV We are (only) progressing at % of the rate originally planned. SPI > 1 Mean more work was completed than was planned; SPI < 1 Mean less work was completed than was planned EAC AC + Bottom Up ETC This formula calculates actual costs to date, plus a new estimate for the remaining work. It is used when the original estimate was fundamentally flawed. EAC (BAC / CPI) This formula is used if no variances from the BAC have occurred, or you will continue at the same rate of spending. EAC AC + (BAC-EV) This formula calculates actual costs to date plus remaining budget. It is used when current variances are thought to be atypical of the future. EAC AC+ (BAC EV) CPI x SPI This formula calculates actual to date plus the remaining budget modified by performance. It is used when current variances are thought to be typical of the future
9 and when project constraints will influence the completion of the remaining effort. So for example, it might be used when the cumulative CPI is less than one and a firm completion date must be met. ETC EAC AC A more accurate way is to re-estimate cost of the remaining work from the bottom-up. VAC BAC EAC How much over or under budget will we be at the end of the project? Float Beta/ PERT Triangular LS-ES Or LF-EF O + 4M + P 6 O + M + P 3 The amount of time an activity can be delayed without delaying the project end date or an intermediary milestone. Three Point Estimating Three Point Estimating Online Practice Questions Hands down, this web site has the toughest questions around. Lehmann provides sample questions in a variety of formats. From the site, you can take a free 75-question simulated, timed (90 minute) exam. He also includes a link to over 3,000 free sample questions (4,000 for PMI members) as well as a download option (PDF) for an additional 175 sample questions, which is also available in German. What's more, smartphone owners can access another 30 free questions for their iphone/ipad and/or Android in the itunes Store and Android Market, respectively. This site offers two different free "mock exams" the first has 70 questions; the second has 28 questions, and the answers to the questions are included at the end of each exam. What I like most about this site, however, is that you can filter the sample questions by the various knowledge areas covered in the exam (i.e., questions on Risk Management, or Quality Management, or Ethics, etc.), so you can focus your studies on the areas where you think you need the most help. The site also includes a link to a free, timed 200-question PMP practice exam (although you do have to register on the site). This PMP Exam study site includes a huge, sample-question test bank over 1,000 free practice exam questions. Once you register on the site, you'll be able to access the vast test bank, as well as an unlimited number of full-length mock exams, customizable PMP flashcards, and a PMP dictionary. Two nice features of note on this site: first, once you take a practice exam, you can re-open it for review; second, the practice exam provides you with visual, analytical progress reporting, so you know exactly where you stand during your mock exam. If you're looking for something short and sweet, this excerpt from Whizlabs' PMP Exam Simulator gives you 20 free PMP sample questions to test your readiness. There are five questions per page, and the answers--as well as
10 explanations for each question--are available at the bottom of each page. In addition, the site provides suggested reading, related articles and resources for each question, giving you additional support in areas where you may need more help. Offering 200 objective sample questions (and their answers) on each of two mock exams, this site will give you a good idea of what you'll see on the actual exam. Unique to this site, you'll be able to see a pattern or progression of exam questions based on the PMBOK areas of knowledge. The free, sample exam on the PMP Question World site is rather like the old Choose Your Own Adventure books; you decide how many questions you'd like to answer in your mock exam. Possible questions come from all nine PMBOK knowledge areas, and you can take the mock exam as many times as you like. The sample exam does not display correct answers; however, practice questions -- with their answers--are also available on the site. You can also "share" questions with your fellow PMP exam-takers. Hoping to provide training that will "rock your face off," the Passionate Project Management site offers you three free, timed practice exams -- a 15-question/18-minute option, a 50-question/60-minute option, and a 100-question/120- minute option. Once you take the practice exam, you'll see your score (%) as it relates to the passing score for that mock exam. You can then Review the Quiz, going back over both your correct and incorrect answers. The PM Exam Simulator gives you the opportunity to practice taking the PMP Exam in a way that mimics the actual exam. The Simulator feeds you questions of the same style and difficulty that you'll see on the exam and proportionately as far as the correct process group (i.e., Initiation=11%, Planning =23%, etc.). You'll experience various types of questions, from formula-based questions to interpretational questions. Another plus for this site is that you can take the practice exam in three modes: Real Exam Mode (just like the real PMP exam experience); Timed Mode (receive hints and answers, but still adhere to a limited time); or Learning Mode (receive hints and answers with no time limit).