October 19, 2023

Project Management Terminology: 15 Terms a PM Must Know 

Project Management Terminology Video

Do watch the video, as it includes more visuals and explanations than the text below.

1. Project Charter

I know many companies do not use a Project Charter to initiate a project.

Nevertheless, in the minds of project managers, this term has transformed.

You may not need a formal document.

But you do want to have the vital information it contains.

A project charter is a document that contains high-level information about the project and its boundaries.

Also, it gives authority to the project manager to spend resources to reach project objectives.

At least you need to capture:

  • Project Goal
  • Project Business Case
  • High-level requirements
  • High-level scope
  • High-level budget
  • Deadline and Milestones
  • Assumptions
  • High-level risks.

Ideally, sponsors and customers should give a sign-off on it.

2. Stakeholders

A stakeholder is a person or a group of people who can impact the project or can be impacted by the results of your work.

We are talking about the positive and negative impact here.

For sure, the people who pay for the project and people who will benefit from the project results are you, key stakeholders.

But there are dramatically more stakeholders even on a smaller project. All your team members are stakeholders.

And some of them are also key ones.

Subject Matter Experts in your company and outside of it are also stakeholders.

You boss, end-users, and executives who initiated the project.

So, the list is long.

You need to develop a broader look at project stakeholders. And there’s a critical reason to do it.

Let’s talk about it right now.

3. Project Requirements

Project requirements are the traits, capabilities, and characteristics of the final product, service, result.

That’s quite simple, but why it’s so important?

You need to understand that project requirements do not come only from your customers and clients.

All stakeholders provide requirements for the project.

Some of the requirements relating to the final product you need to deliver, some of them – requirements to the processes and tools you need to use. In other words, requirement for your project management approach.

Other stakeholders, like the CEO of the company, will require you to communicate with clients in a certain way.

Here’s the main takeaway for you.

If you miss identifying key stakeholders, you will miss identifying key requirements. However, sooner or later these requirements will appear. It’ll be the scope of work or risks you didn’t anticipate.

4. The Requirements Traceability Matrix

It’s a tool that helps you tie together project goals, requirements, stakeholders, and major deliverables in one place.

Usually, it’s a simple spreadsheet that lists all of this information.

It also helps you to identify conflicting requirements or requirements that should not be a part of the project because they don’t support any project goals.

5. Project Triple Constraint

A Project Triple Constraint is a concept that states that the scope of work is the function of time and costs. It means that the more you want to do, the more you need to pay and the more time to allocate.

Likewise, you can trade money for time. Pay more to finish the project faster.

You need to keep this triangle always in mind. On a project, nothing is free of charge. Moreover, whenever there’s a change in a project – you don’t have many options. You need to make a trade-off of scope, costs, or time.

6. Project Scope

The Scope or scope of work is the actual work you need to perform to create project deliverables and reach project objectives.

It can be mental work, or physical labor, your management efforts.

You are always interested in identifying 100% of the scope of work for the given project.

You need to understand that project scope strongly depends on the project goal and project requirements.

So, for example, you may need to create a website as a project result.

But as you understand, it might be a social network like Facebook or a simple blog like mine.

And even Facebook and Twitter will have different goals and requirements and, therefore, different scope of work.

7. Work Breakdown Structure

You need to identify 100% of the project scope.

Work Breakdown Structure or WBS helps you to do it.

It’s a simple tool with serious underlying concepts and principles. It shows the decomposition of project work.

You start from the top, where you have your final product, service, or result. Then, you break it down into major pieces.

Then, you break down each piece further into smaller pieces. You continue until you get pieces small enough to estimate and manage.

Here’s the trick:

You take your smallest pieces and break them down into actual tasks that people will do to create a piece of the project. You estimate these tasks to get the most accurate schedule and budget.

8. Deliverables

A deliverable is a tangible or intangible result required to reach project objectives.

So as you saw, these pieces of the Work Breakdown Structure are called deliverables.

There’s a critical project management approach:

You always need to work toward creating deliverables.

It’s that simple.

First, you identify project deliverables.

Then, you ensure that each person on your team performs tasks aimed only at delivering certain deliverables.

You can also improve this approach by focusing only on one or two deliverables at a time.

This way, you can show your progress to stakeholders often. You can get feedback from them. Your team always knows what to do and what is a priority.

By the way, keep in mind that putting all the pieces together is also a deliverable.

You need to hand off your project results as a whole.

9. Project Milestones

It’s simply a set of critical dates on a project.

You need to understand that you need milestones more than any other stakeholder.

Ideally, your milestones are the dates when you show finished deliverables to your clients. Including the final project result.

So, here’s how it works now:

You work towards creating deliverables. And you try to finish this piece of work by the milestone date. This way, you make your project more manageable and more predictable. You’re kind of doing small sub-projects.

However, you do need to take a look at the big picture of the project from time to time.

You also need to think several steps ahead to ensure you streamline the work of the team.

10. Baselines

There are three project baselines. Scope, Cost, and Schedule Baselines.

A baseline is simply an approved version of the project scope, budget or schedule.

For example, the scope baseline consists of the Project Scope Statement, Work Breakdown Structure, and WBS Dictionary.

At some point, you will get draft versions of these documents.

They’ll seem pretty realistic to you. It will fill like you identified 100% of all the work.

Then, you show these drafts to clients, and they approve them. That’s how you get a baseline.

Again, you, as a project manager, need baselines more than clients do.

You see, based on the scope baseline, you’ll do the estimates of costs and time.

So, you’ll estimate only the work that is in the scope baseline.

Now, if anything changes in the Scope Baseline – it’s a valid reason for you to make a change in schedule and costs.

If a client wants to add something to the project – you can increase the budget and move the deadline.

11. Project Management Process

Project Management Process is a high-level concept that shows how to make your project management efforts structured.

So, to manage a project from start to end, you need to take five steps.

Project management institute calls these steps Process Groups. They are called process groups:

  • Initiating
  • Planning
  • Executing
  • Monitoring and Controlling
  • Closing

The most important thing you need to remember is that it’s your responsibility to fill these groups with appropriate processes, tools, and workflows.

Don’t worry, usually, you don’t do it from scratch.

A company that does projects has some common set of such processes.

12. Project Life Cycle

Project Life Cycle is a set of phases that a project should live through to get to the project goal.

Each project has its unique life cycle to some extent.

But within one industry, there are best practices, and you’ll use only one or two life cycles.

The main confusion happens in understanding the life cycles of small versus large projects.

In smaller projects, all phases happen almost in at once.

Therefore, it looks like it’s just one single mess of activities.

On a large project, phases are longer and more complex. They do look like sub-projects. Even if they overlap.

That’s why when you run a small project, you usually think in terms of on Project Management Process.

On large projects, you have a different project management process for each phase.

13. Escalation

Escalation is a communication technique that you use to solve a problem that is beyond your level of authority.

It usually involves your leadership.

By nature, a project manager doesn’t have enough authority to rule out all the decisions.

So, escalation is a normal practice that you should not be afraid of. But for sure, you need to do it in the most efficient manner for your leadership.

Keep in mind that escalation is often a suitable answer for interview questions for the role of a junior PM

14. Risk Mitigation Strategy

In 2019, a project manager must know that risk management is important.

Risk Mitigation Strategy is your action plan to deal with a risk.

There’s one important thing that many PMs miss.

You develop a risk mitigation plan for a specific risk.

There are cases when one mitigation strategy can impact other risks as well.

But in any case, you need to track them separately. Because the effect of your mitigation strategy may be different for different risks.

Likewise, if you allocated risk reserves for a specific risk – you should not use these reserves for other risks or to cover up your delays. If a risk doesn’t happen – release the reserves.

15. Risk Reserves

These are just your reserves of time, money, or resources to tackle a risk if it happens or to overcome it proactively.

Don’t treat your reserves as a pool of extra resources you can use at your discretion to keep the project on track. Otherwise, you’ll quickly lose control.

A risk reserve is dedicated to a specific risk. It should be clearly shown in your project management plan.