PMI VISUAL WALL · PART 2 OF 2

Avoid

eliminate the threat or its cause (change the plan).

Transfer

shift impact & ownership to a third party (insurance, warranty, fixed-price).

Mitigate

reduce probability and/or impact.

Accept

take no action (passive) or set a contingency (active).

Escalate

raise to the level with authority to act.

Exploit

make certain the opportunity is realised (mirror of Avoid).

Share

partner with someone better able to capture it (mirror of Transfer).

Enhance

increase probability and/or impact (mirror of Mitigate).

Accept

take it if it arrives, but don't actively chase it.

Escalate

raise to the level that can pursue it.

• Contingency reserve — for known risks; inside the cost baseline; the PM controls it.
• Management reserve — for unknown risks; outside the baseline; management approves its release.

• Qualitative = subjective P×I, fast; quantitative = numeric model of overall risk.
• Contingency (known, PM) vs management (unknown, mgmt) reserve.
• Risk owner manages the risk; a response owner executes an action.
• A trigger is the early-warning sign a risk is occurring.

• Quantitative analysis defends the contingency ask to the board.
• Response strategy = a cost-vs-exposure trade, not box-ticking.
• Watch overall risk, not just the loudest single risk.

• Line install: supplier-delay risk → qualitative HIGH → Monte Carlo shows P80 finish +5 wks → response = transfer (LD clause) + mitigate (dual-source).

EMV = Σ (probability × impact); impacts are signed (− threat, + opportunity).

• Threat: 20% × (−$500k) = −$100k
• Opportunity: 30% × (+$200k) = +$60k
• Net EMV = −$40k → size the contingency accordingly.

Feed EMVs into a decision tree to choose the option with the best expected value (e.g. build vs buy).

• Monte Carlo: simulate thousands of runs → a range & confidence (e.g. P80 cost/finish).
• Sensitivity / tornado: rank which risks swing the outcome most.
• Decision tree: compare options by EMV under uncertainty.
• Outputs justify reserves and feed the cost baseline (EVM).

• Portfolio: balance the mix of bids & live programs against capacity.
• Program: integrate ship + combat system + training so the capability benefit lands.
• Project: deliver the radar subsystem on cost & to spec.

• Portfolio = right mix · Program = right benefits · Project = right delivery.
• "Risk rolls up; response rolls down."
• Reserves: contingency = knowns I control; management = unknowns the boss controls.

PV — Planned Value

budgeted cost of work scheduled (the baseline plan). Total PV = BAC, Budget at Completion.

EV — Earned Value

budgeted cost of work performed. EV = % complete × BAC.

AC — Actual Cost

actual cost of the work performed — what you really spent.

• Variances in $, indices are ratios. EV is always first.
• Positive variance & index > 1 = favourable.
• EV = % complete × BAC.
• SV weakness: measured in $, it drifts to 0 at the end even if late — pair it with the schedule network or SPI.
• Cost pair uses AC; schedule pair uses PV.

• One integrated number for scope + schedule + cost.
• Objective early-warning system — trends, not anecdotes.
• CPI is famously stable after ~20% complete — trust the trend.
• Reports up cleanly through program & portfolio.

• Needs a sound scope, schedule & cost baseline first (Poster 6 baselines).
• Risk reserves sit inside/outside the baseline (Poster 12).
• Forecasting (EAC/ETC/VAC/TCPI) builds on these — Poster 15.

• A $100k line-upgrade is 40% built but has consumed $45k by the planned-50% point: SPI 0.80 & CPI 0.89 flag it behind and over early enough to act.

• "EV is the hero — it opens every formula."
• Variance = minus, Index = divide; + and >1 are good.
• Cost↔AC, Schedule↔PV (C-A, S-P).

BAC

Budget at Completion — the baseline total (the plan).

EAC

Estimate at Completion — forecast total cost.

ETC

Estimate to Complete — cost of the remaining work.

VAC

Variance at Completion — projected over/under at the end.

TCPI

To-Complete Performance Index — efficiency needed from here.

• TCPI = work remaining ÷ funds remaining.
• Compare to your CPI: TCPI 0.89 vs CPI 0.89 = on track.
• Here TCPI 1.09 > CPI 0.89 → you must run better than you ever have → the BAC is likely unrecoverable.
• Response: re-baseline, de-scope, or accept the overrun.

• ETC = EAC − AC; VAC = BAC − EAC.
• EAC = BAC/CPI is the default "current-trend" forecast.
• Know all four EAC formulas & their assumptions.
• TCPI > 1 (and > CPI) = must tighten up; recovery is hard.

• EAC & VAC answer the board's question: "Where will we land?"
• TCPI tells you if a recovery target is realistic before you promise it.
• Forecasts trigger re-baselining & funding decisions.

• The $100k line upgrade now forecasts $112.5k (EAC) with a −$12.5k VAC. TCPI 1.09 says recovery to budget is unlikely → present a re-baseline + a de-scope option.

• BAC=plan · EAC=forecast · ETC=what's left · VAC=the surprise.
• "ETC peels AC off EAC."
• If TCPI > CPI, you're in trouble.

• Programs exist for benefits & relatedness, not size alone.
• Capability is delivered by a component; the benefit is realised in operations.
• Benefits transition hands capability to BAU; sustainment continues after closure.
• Benefits have owners & metrics — measured, not assumed.

• Programs convert strategy → capability → benefit.
• The sponsor cares about outcomes, not outputs.
• Governance gates are benefit-driven — fund what realises value.

• A frigate capability program: shipbuild + combat-system + training/sustainment components. Benefit = a deployable, supportable naval capability — sustained over decades, not just a hull delivered.

• Realises the PMBOK 7 value delivery system (Poster 4) at program scale.
• BA's solution evaluation (Poster 10) feeds benefit measurement.
• Sits beneath the portfolio (Posters 18–19) and above projects.

• "Projects make outputs; programs make BENEFITS."
• Benefits cycle — I·A·D·T·S: Identify → Analyse/plan → Deliver → Transition → Sustain.
• "A program is related; a portfolio is aligned."

• Link the program to organisational strategy.
• Program roadmap & business case.
• Environmental / readiness assessment.

• Far more numerous, diverse & long-term than a project's.
• Identify → analyse → plan → engage, continuously.
• Engagement is strategic, not just communication.

• Program board / steering committee + sponsor.
• Phase-gate reviews & component authorisation.
• Go / no-go; balances component vs program tension.

• A high-level chronological view linking components, milestones & benefits to strategy.
• Shows the why-when; the schedule shows the what-when.
• Anchors gate decisions & sequencing of tranches.

• The 5 domains run concurrently across the life cycle.
• Governance authorises components & gates phases.
• Roadmap ≠ schedule — higher-level, benefit/milestone-oriented.
• The program board makes go / no-go calls.

• Governance is the value-protection mechanism.
• The board & sponsor own the benefits case.
• Kill failing components early at the gate.

• The frigate program's board gates each tranche; the roadmap sequences build → integration → trials → handover; stakeholders span Navy, government, primes, unions & community.

• 5 domains — S·B·S·G·L: "Some Big Ships Get Launched" (Strategy, Benefits, Stakeholders, Governance, Life cycle).
• Phases: Define → Deliver → Close.
• Roadmap = why-when; schedule = what-when.

• Programs — related components run for benefits.
• Projects — standalone deliverables.
• Subsidiary portfolios — e.g. by division.
• Operations / BAU — ongoing work that consumes the same capacity.

The portfolio is the organisation's whole investment basket — and it is ongoing, not temporary.

• Maximise value of the whole portfolio.
• Align every investment to strategy.
• Balance risk/reward & short/long term.
• Optimise scarce resources & funding.
• Transparency for investment decisions.

• Portfolio = strategic alignment; components may be unrelated.
• A portfolio includes operations, not just projects/programs.
• "Right work" (portfolio) vs "work right" (project/program).
• Portfolio management is ongoing, not temporary.

• The portfolio is the board's investment steering wheel.
• This is where strategy becomes a funded plan.
• Decisions are fund / defer / kill against strategy.

• Sits above programs (Posters 16–17) & projects in the hierarchy (Poster 1).
• Manages aggregate risk & capacity (Poster 13).
• Governed within OPM (Poster 20).

• A prime's portfolio: naval programs + land-vehicle programs + R&D projects + sustainment operations + live bids — unrelated, but all balanced for strategy, capacity & risk.

• "Portfolio = right WORK · project = work RIGHT."
• "A program is related; a portfolio is aligned."
• The portfolio is the whole investment basket — and it never ends.

• 1 Strategic Management — align to strategy; portfolio roadmap & value proposition.
• 2 Governance — decision framework; authorise / terminate components; oversight & optimisation.
• 3 Capacity & Capability — balance resource & funding demand vs supply.
• 4 Stakeholder Engagement — engage decision-makers & sponsors.
• 5 Value Management — define, maximise, deliver & measure value.
• 6 Risk Management — manage aggregate risk & the risk/return balance.

• Weighted scoring models against strategic criteria.
• Prioritisation matrices & ranking.
• Bubble / quadrant charts (risk vs reward, above).
• Efficient frontier — best value for a given risk.
• Portfolio roadmap & dashboards for transparency.

• Portfolio management continuously balances & reprioritises.
• Governance authorises & terminates components.
• Capacity management = demand vs supply of resources/funding.
• Value & risk are managed at the aggregate level.

• Rebalance as strategy shifts — the mix is never "done".
• Governance kills the zombies that drain capacity.
• One dashboard for the entire investment.

• The prime scores bids & programs against strategic criteria, balances naval vs land vs air, checks engineering capacity, and the board authorises the optimal mix — re-reviewed each quarter.

• Pipeline — C·E·S·P·B·A: Categorise, Evaluate, Select, Prioritise, Balance, Authorise.
• "Pick · balance · fund · review — forever."
• Bubble chart = risk vs reward; size = cost.

• Structural: PMO, governance bodies, reporting lines.
• Cultural: values, executive sponsorship, risk-awareness.
• Methodology: consistent, tailored practices & templates.
• People / HR: competency, training, career paths.
• Knowledge: lessons learned, KM, continuous learning.

Maturity = the ability to deliver consistently & predictably. The improvement cycle repeats:

Progression of practice: Standardise → Measure → Control → Continuously Improve (SMCI), built from best practices → capabilities → outcomes → KPIs.

• OPM integrates portfolio + program + project + enablers.
• OPM is a strategy-execution framework, not a methodology by itself.
• OPM3 = maturity model; cycle = Acquire → Assess → Improve.
• Maturity path = SMCI (Standardise, Measure, Control, Improve).

• OPM is the C-suite's strategy-delivery engine.
• Maturity = predictability — fewer surprises, better forecasts.
• Invest in enablers (PMO, methodology, capability), not just projects.

• A multi-plant manufacturer standardises stage gates, stands up a PMO, and uplifts PM capability. Maturity climbs from ad-hoc to measured & controlled — and strategic initiatives start landing on time, plant after plant.

• Wraps the entire hierarchy of Poster 1 — portfolio, program & project together.
• Provides the governance & methodology that tailoring (Poster 5) operates within.
• Feeds on lessons learned & benefits data from every delivery.

• "OPM = strategy delivered, consistently."
• PPP + enablers = OPM (Portfolio, Program, Project + the org).
• Maturity ladder — S·M·C·I; improvement loop — Acquire → Assess → Improve.

Channels = n(n − 1) ÷ 2

EMV = Σ (Probability × Impact)
− threat · + opportunity

• NPV — higher is better; already discounted.
• IRR — higher is better.
• ROI = (gain − cost) ÷ cost; higher better.
• Payback — shorter is better.
• BCR = benefits ÷ costs; > 1 good.

PTA = ((Ceiling − Target Price) ÷ buyer share) + Target Cost

Point of total assumption — above it, the seller bears all extra cost (incentive contracts).

• EV first in every EVM formula.
• Variance = subtract; index = divide.
• Positive variance & index > 1 = good.
• Cost ↔ AC; Schedule ↔ PV.
• EV = % complete × BAC.
• ETC = EAC − AC; VAC = BAC − EAC.
• TCPI > CPI ⇒ recovery is hard.
• Float 0 ⇒ on the critical path.

• CPI / SPI interpretation & EAC = BAC/CPI.
• PERT (O+4M+P)/6 and σ = (P−O)/6.
• Channels n(n−1)/2.
• Total float = LS − ES.
• EMV for decision trees.

• 12 Principles: how to act when the playbook runs out.
• 8 Domains: concurrent activity areas that replaced the knowledge areas.
• Tailoring: fit the approach to context — appropriate rigour.
• Models/Methods/Artifacts: think · do · show.
• Business Analysis: right problem → right solution → real value.
• Risk: max opportunity, min threat; managed at 3 levels.
• EVM: one number for scope+schedule+cost; forecast the finish.
• Program: related work → benefits that outlive the program.
• Portfolio: the right work; balance the mix to strategy.
• OPM: deliver strategy consistently (PPP + enablers); mature.

• 12 Principles: "Stewards Tend Stakeholders' Value · Systems Lead Tailored Quality · Complexity, Risk, Adaptability, Change."
• 8 Domains: "Some Teams Develop Plans, Producing Deliverables Measured under Uncertainty."
• BA domains (NSEATS): "Never Stop Eliciting And Tracing Solutions."
• Risk: threats A-T-M-A-E · opps E-S-E-A-E · "rolls up, response rolls down."
• EVM: EV opens every formula; minus = variance, divide = index; +/>1 good.
• Program (SBSGL): "Some Big Ships Get Launched."
• Portfolio (CESPBA): Categorise·Evaluate·Select·Prioritise·Balance·Authorise.
• OPM: PPP + enablers; maturity = S-M-C-I.

• Read the stem for MOST · BEST · FIRST · NEXT · EXCEPT · NOT.
• Prefer proactive, value-driven, stakeholder-respecting answers.
• Principles over rigid process; tailor to context.
• Address the root cause; gather information before drastic action.
• Consult the plan / follow the process before escalating.
• Escalate only when beyond your authority.
• Manage risk — don't ignore it or "always avoid".
• EVM: apply the sign rules; EAC = BAC/CPI unless told otherwise.
• Distrust absolutes ("always / never"); eliminate the clearly wrong first.
• The PM is an ethical servant-leader: Responsibility, Respect, Fairness, Honesty.