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Defining the
Project
CHAPTER 4
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Learning Objectives

u Identify key elements of a project scope statement and understand

why a complete scope statement is critical to project success.
u Understand why it is important to establish project priorities in terms
of cost, time, and performance.
u Demonstrate the importance of a work breakdown structure (WBS)
to the management of projects and how it serves as a data base
for planning and control.
u Demonstrate how the organization breakdown structure (OBS)
establishes accountability to organizational units.
u Describe a process breakdown structure (PBS) and when to use it.
u Create responsibility matrices for small projects.
u Create a communication plan for a project.
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Chapter Outline

u Step 1: Defining the Project Scope

u Step 2: Establishing Project Priorities
u Step 3: Creating the Work Breakdown Structure
u Step 4: Integrating the WBS with the Organization
u Step 5: Coding the WBS for the Information System
u Process Breakdown Structure
u Responsibility Matrices
u Project Communication Plan
u Assignment
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Step 1:
Defining the
Project Scope
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Step 1: Defining the Project
Scope

u Project Scope – A definition of the end result or mission of the

project—a product or service for the client/customer—in
specific, tangible, and measurable terms.
u Purpose of the Scope Statement [“statements of work” (SOW)]:
u To clearly define the deliverable(s) for the end user.
u To focus the project on successful completion of its goals.
u To be used by the project owner and participants as a planning tool
and for measuring project success.
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Project Scope Checklist

1. Project objective
2. Deliverables
3. Milestones
4. Technical requirements
5. Limits and exclusions
6. Reviews with customer
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Step 1: Defining the Project
Scope

u A project charter refers to a document that authorizes the project

manager to initiate and lead the project.
u This document is issued by upper management and provides the project
manager with written authority to use organizational resources for
project activities.
u Often the charter will include a brief scope description as well as such
items as risk limits, business case, spending limits, and even team
composition.
u Many projects suffer from scope creep, which is the tendency for
the project scope to expand over time—usually by changing
requirements, specifications, and priorities.
u Scope creep can be reduced by carefully writing your scope statement.
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Step 2:
Establishing
Project
Priorities
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Step 2: Establishing Project
Priorities

u Quality and the ultimate

success of a project are
traditionally defined as
meeting and/or exceeding
the expectations of the
customer and/or upper
management in terms of cost
(budget), time (schedule),
and performance (scope) of
the project.
u One of the primary jobs of a
project manager is to
manage the trade-offs
among time, cost, and
performance.
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Step 2: Establishing Project
Priorities

u One technique found in practice that is useful for this purpose is

completing a priority matrix for the project to identify which
criterion is constrained, which should be enhanced, and which can
be accepted:
u Constrain. The original parameter is fixed. The project must meet the
completion date, specifications and scope of the project, or budget.
u Enhance. Given the scope of the project, which criterion should be
optimized? In the case of time and cost, this usually means taking
advantage of opportunities to either reduce costs or shorten the
schedule. Conversely, with regard to performance, enhancing means
adding value to the project.
u Accept. For which criterion is it tolerable not to meet the original
parameters? When trade-offs have to be made, is it permissible for the
schedule to slip, to reduce the scope and performance of the project,
or to go over budget?
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Example of a Project Priority
Matrix
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Step 3:
Creating the
Work
Breakdown
Structure
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Major Groupings Found in a
WBS

u Once the scope and deliverables have been identified, the work
of the project can be successively subdivided into smaller and
smaller work elements.
u The outcome of this hierarchical process is called the work
breakdown structure (WBS).
u Use of a WBS helps to assure project managers that all products
and work elements are identified, to integrate the project with the
current organization, and to establish a basis for control.
u Basically, the WBS is an outline of the project with different levels of
detail.
u Best suited for design and build projects that have tangible
outcomes rather than process-oriented projects.
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Hierarchical
Breakdown of
the WBS
The lowest level of the WBS is
called a work package.
Work packages are short-
duration tasks that have a
definite start and stop point,
consume resources, and
represent cost.
Each work package is a
control point.
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How WBS Helps the Project
Manager

u The WBS defines all the elements of the project in a hierarchical framework
and establishes their relationships to the project end item(s).
u This hierarchical structure facilitates evaluation of cost, time, and technical
performance at all levels in the organization over the life of the project.
u Provides management with information appropriate to each organizational
level.
u Helps in the development of the organization breakdown structure (OBS).
which assigns project responsibilities to organizational units and individuals
u Helps manage plan, schedule, and budget.
u Defines communication channels and assists in coordinating the various
project elements.
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A Simple WBS Development
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Work Package

u A work package is the lowest level of the WBS.

u It is output-oriented in that it:
u Defines work (what).
u Identifies time to complete a work package (how long).
u Identifies a time-phased budget to complete a work package
(cost).
u Identifies resources needed to complete a work package (how
much).
u Identifies a person responsible for units of work (who).
u Identifies monitoring points (milestones) for measuring success.
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Step 4: Integrating the WBS
with the Organization

u The WBS is used to link the organizational units responsible for

performing the work.
u In practice, the outcome of this process is the organization
breakdown structure (OBS).
u The OBS depicts how the firm has organized to discharge work
responsibility.
u The purposes of the OBS are to provide a framework to:
u summarize organization unit work performance,
u identify organization units responsible for work packages, and
u tie the organizational unit to cost control accounts.
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Step 4: Integrating the WBS
with the Organization
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Step 5:
Coding the
WBS for the
Information
System
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Step 5: Coding the WBS for the
Information System

u WBS Coding System defines:

u Levels and elements of the WBS
u Organization elements
u Work packages
u Budget and cost information
u Allows reports to be consolidated at any level in the
organization structure
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Coding the WBS

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Process
Breakdown
Structure
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Process Breakdown Structure

u It is more difficult to apply WBS to less tangible, process-oriented

projects in which the final outcome is a product of a series of steps
or phases.
u Here, the big difference is that the project evolves over time with
each phase affecting the next phase.
u Information systems projects typically fall in this category—for
example, creating an extranet website or an internal software
database system.
u Process projects are driven by performance requirements, not by
plans/blueprints.
u Some practitioners choose to utilize what we refer to as a process
breakdown structure (PBS) instead of the classic WBS.
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Process Breakdown Structure

u Checklists that contain the phase exit requirements are

developed to manage project progress.
u These checklists provide the means to support phase walk-
throughs and reviews.
u Checklists vary depending upon the project and activities
involved but typically include the following details:
u Deliverables needed to exit a phase and begin a new one.
u Quality checkpoints to ensure that deliverables are complete and
accurate.
u Sign-offs by all responsible stakeholders to indicate that the phase
has been successfully completed and that the project should move
on to the next phase.
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Responsibility
Matrices
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Responsibility Matrices

u Responsibility matrices provide a means for all participants in a

project to view their responsibilities and agree on their
assignments.
u They also help clarify the extent or type of authority exercised
by each participant in performing an activity in which two or
more parties have overlapping involvement.
u By using an RM and by defining authority, responsibility, and
communications within its framework, the relationship between
different organizational units and the work content of the
project is made clear.
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Responsibility Matrices
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Responsibility Matrices
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Project
Communication
Plan
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Project Communication Plan

u Once the project deliverables and work are clearly identified,

following up with an internal communication plan is vital.
u Stories abound of poor communication as a major contributor
to project failure.
u Having a robust communications plan can go a long way
toward mitigating project problems and can ensure that
customers, team members, and other stakeholders have the
information to do their jobs.
u The communication plan is usually created by the project
manager and/or the project team in the early stage of project
planning.
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Project Communication Plan

u Project communication plans address the following core

questions:
u What information needs to be collected and when?
u Who will receive the information?
u What methods will be used to gather and store information?
u What are the limits, if any, on who has access to certain kinds of
information?
u When will the information be communicated?
u How will it be communicated?
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Project Communication Plan

u Developing a communication plan that answers these

questions usually entails the following basic steps:
1. Stakeholder analysis – Identify the target groups.
u Typical groups could be the customer, sponsor, project team, project
office, or anyone who needs project information to make decisions
and/or contribute to project progress.
u By identifying stakeholders and prioritizing them on the “Power/Interest”
map, you can plan the type and frequency of communications needed.

2. Information needs – What information is pertinent to stakeholders

who contribute to the project’s progress?
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Project Communication Plan

u Developing a communication plan that answers these

questions usually entails the following basic steps:
3. Sources of information – Where does the information reside? `and
how will it be collected?
4. Dissemination modes – In today’s world, traditional status report
meetings are being supplemented by e-mail, teleconferencing,
SharePoint, and a variety of database sharing programs to
circulate information.
5. Responsibility and timing – Determine who will send out the
information and when.
u Timing and frequency of distribution appropriate to the information need
to be established.
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“Power/Interest” map
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Shale Oil Research Project
Communication Plan
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Assignment
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Assignment

u Case 4.1 – Manchester United Soccer Club (Page 125).

u Case 4.2 – The Home Improvement Project (Page 126).
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Thank You