CHAPTER FOUR

Defining
the Project

Copyright © 2014 McGraw-Hill Education.

All Rights Reserved.

PowerPoint Presentation by Charlie Cook

Where We Are Now

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Project Life Cycle
 Defining the Project

Step 1: Defining the Project Scope

Step 2: Establishing Project Priorities
Step 3: Creating the Work Breakdown Structure
Step 4: Integrating the WBS with the Organization
Step 5: Coding the WBS for the Information
System

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 Project Scope Management
The processes required to ensure that the project includes all the work
required and only the work required to complete the project successfully

• The customer, project team and all relevant stakeholders must have
the same understanding of:
– What are the project’s product (s); and
– What processes will be used in producing them
• The scope refers to all the work involved in creating these products
Product scope:
– The features and functions that characterize a product, service, or result
Project scope:
– The work that needs to be accomplished to deliver a product, service, or
result with the specified features and functions.

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 Scope Management Plan (SMP)
• The Scope Management Plan is a document
that includes descriptions of how the team will
prepare the project scope statement, create the
WBS, verify completion of the project
deliverables, and control requests for changes
to the project scope

• Key inputs include the project charter,

preliminary scope statement, and project
management plan

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 Step 1: Defining the Project Scope

• Stakeholders needs and expectations are

analyzed and converted into requirements.
• The projects assumptions and constraints are
further analyzed for completeness and accuracy.
• The accuracy of time, cost, and resource
estimates are improved and validated.
• The project’s baseline is validated for accuracy

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 Defining the Project Scope
• 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.
• Purpose of the Scope Statement
– To clearly define the deliverable(s) for the end user.
– To focus the project on successful completion
of its goals.
– 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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 Project Scope: Terms and Definitions
• Scope Statements
– Also called statements of work (SOW)
• Project Charter
– Can contain an expanded version of scope statement
– A document authorizing the project manager to
initiate and lead the project.
• Scope Creep
– The tendency for the project scope to expand over
time due to changing requirements, specifications,
and priorities.

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 What Went Wrong?
An Example of Scope Creep
In 2001, McDonald’s fast-food chain initiated a
project to create an intranet that would connect its
headquarters with all of its restaurants to provide
detailed operational information in real time; after
spending $170 million on consultants and initial
implementation planning, McDonald’s realized
that the project was too much to handle and
terminated it

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 Collect Requirements
• Collect requirements is the process of defining and
documenting stakeholders’ needs to meet the project
objectives.
• It includes quantified and documented needs and
expectation of the sponsor, customer, and other
stakeholders. It is about defining and managing
customer expectation.
• Project requirements: include business requirements,
project management requirements, delivery
requirements, etc.
• Product requirements: include information on technical
requirements, security requirements, performance
requirements, etc.
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 Project Scope Statement
Project scope statement describes in detail, the project’s deliverables
and the work required to create those deliverables
• Product scope description: progressively elaborates the
characteristic of the product or service described in the
Charter.
• Product acceptance criteria: which defines the process
and criteria for accepting the completed product or service.
• Project deliverables: which includes the product or service,
plus the project management reports.
• Project exclusions: it specifies what is out of scope.
• Project constraints: describes the constraints associated
with project scope, e.g. pre-defined budget, or imposed
milestones.

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 Step 2: Establishing Project Priorities
• Causes of Project Trade-offs
– Shifts in the relative importance of criterions related
to cost, time, and performance parameters
• Budget–Cost
• Schedule–Time
• Performance–Scope

• Managing the Priorities of Project Trade-offs

– Constrain: a parameter is a fixed requirement.
– Enhance: optimizing a criterion over others.
– Accept: reducing (or not meeting) a criterion
requirement.

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Project Management Trade-offs

FIGURE 4.1

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Project Priority Matrix

FIGURE 4.2

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 Step 3: Creating the Work
Breakdown Structure

• Work Breakdown Structure (WBS)

– An hierarchical outline (map) that identifies the
products and work elements involved in a project.
– Defines the relationship of the final deliverable
(the project) to its subdeliverables, and in turn,
their relationships to work packages.
– 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

* This breakdown groups work

packages by type of work within a
deliverable and allows assignment
of responsibility to an organizational
unit. This extra step facilitates a
system for monitoring project
progress (discussed in Chapter 13).

FIGURE 4.3

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 How WBS Helps the Project Manager
• WBS
– Facilitates evaluation of cost, time, and technical
performance of the organization on a project.
– Provides management with information appropriate
to each organizational level.
– Helps in the development of the organization
breakdown structure (OBS). which assigns project
responsibilities to organizational units and individuals
– Helps manage plan, schedule, and budget.
– Defines communication channels and assists
in coordinating the various project elements.

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WBS Levels

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 WBS Orientation at Level 1
• Major Deliverables: Tasks at levels 2, 3 etc
oriented towards results
• Scope statement: Focus on the project
objectives outlined in the scope statement
• Geographic Orientation: Useful in
international projects
• Project Phase Orientation: Useful in IT
projects
• Functional Orientation: Aids in tracking
accountability

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 Approaches to WBS Development
• Analogous WBS: Based on best practices used in other
similar project
• Organizationally Oriented WBS: Some organizations
provide guidelines for preparing WBSs to their PM’s
• Top-down WBS: Starts with the key subprojects and
decompose down to the lower levels
• Bottom-up WBS: Starts with detailed tasks and roll
them up to form the activities and subprojects
• Phase-based WBS: Based on project phases such as
feasibility, development, implementation, testing etc.

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 Work Packages
• A work package is the lowest level of the WBS.
– It is output-oriented in that it:
1. Defines work (what).
2. Identifies time to complete a work package (how long).
3. Identifies a time-phased budget to complete
a work package (cost).
4. Identifies resources needed to complete
a work package (how much).
5. Identifies a person responsible for units of work (who).
6. Identifies monitoring points (milestones)
for measuring success.

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 The WBS is the Corner Stone of
the Project Plan

The WBS provides the foundation for developing:

• Activity-responsibility matrix
• Network diagram and scheduling
• Costing and budgets
• Risk analysis
• Organizational structure
• Coordination of objectives
• Control

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 WBS Guidelines (1 of 2)
• Ensure that there is a work package to produce
every required deliverable
• The activities in a completed WBS can be re-
arranged and it still will be valid
• Involve the project team in identifying tasks,
estimating duration and resources
• Each suppliers and sub-contractor can provide a
WBS for its area or sub-project
• The work content of a WBS item is the sum of
the WBS items below it.

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 WBS Guidelines (2 of 2)
• The WBS must reflect the nature of work to be
performed
• Each WBS item must be documented to ensure
accurate understanding of the scope work
included and not included in that item.
• The WBS must be a flexible tool to
accommodate inevitable changes in the project
• The WBS must be a tool to control of the work
content in the project according to the scope
statement.

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WBS and Gantt Chart in Microsoft
Project

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WBS- Construction Project

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WBS- Software Project

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New Toy WBS

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Work Breakdown Structure

FIGURE 4.4

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 Step 4: Integrating the WBS
with the Organization

• Organizational Breakdown Structure (OBS)

– Depicts how the firm is organized to discharge its
work responsibility for a project.
• Provides a framework to summarize
organization work unit performance.
• Identifies organization units responsible
for work packages.
• Ties organizational units to cost control
accounts.

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Integration of
WBS and OBS

FIGURE 4.5
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 Step 5: Coding the WBS for
the Information System

• WBS Coding System

– Defines:
• Levels and elements of the WBS
• Organization elements
• Work packages
• Budget and cost information
– Allows reports to be consolidated at
any level in the organization structure

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Coding
the WBS

EXHIBIT 4.5
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WBS for Software Development Project

FIGURE 4.6

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 Team Work:
Develop your project’s WBS

Project Teams will congregate and start working on

developing levels 1-3 of their project’s WBS

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 Responsibility Matrices
• Responsibility Matrix (RM)
– Also called a linear responsibility chart.
– Summarizes the tasks to be accomplished and
who is responsible for what on the project.
• Lists project activities and participants.
• Clarifies critical interfaces between units
and individuals that need coordination.
• Provide an means for all participants to view their
responsibilities and agree on their assignments.
• Clarifies the extent or type of authority that
can be exercised by each participant.

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Responsibility Matrix for a Market Research Project

FIGURE 4.7

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Responsibility Matrix for the Conveyor Belt Project

FIGURE 4.8

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Stakeholder Communications

FIGURE 4.9

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 Project Communication Plan

• What information needs to be collected

and when?
• Who will receive the information?
• What methods will be used to gather
and store information?
• What are the limits, if any, on who has
access to certain kinds of information?
• When will the information be communicated?
• How will it be communicated?

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 Information Needs

• Project status reports

• Deliverable issues
• Changes in scope
• Team status meetings
• Gating decisions
• Accepted request changes
• Action items
• Milestone reports

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 Developing a Communication Plan

1. Stakeholder analysis
2. Information needs
3. Sources of information
4. Dissemination modes
5. Responsibility and timing

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 Distribute Information

• Getting the right information to the right people

at the right time and in a useful format is just as
important as developing the information in the
first place

• Important considerations include:

– Using technology to enhance information distribution
– Formal and informal methods for distributing
– information

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 Distribute Information in an
Effective and Timely Manner

• Don’t bury crucial information

• Don’t be afraid to report bad information
• Oral communication via meetings and informal
talks helps bring important information—good
and bad—out into the open

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 Aspects of Information Distribution
Language: consider using language (project management
terminology) that is understood by others and avoid using poorly
understood acronyms
Noise: interferes with the transmission or understanding of the
message.
Types of Screens: includes personality and perception screens
Feedback: acknowledging receipt of message to ensure common
understanding that does not imply agreement. Ensure that the
message has been understood by asking questions and having the
person repeat the message back to you using their own words
Diversity: consider using various types of communication tools to
clarify concepts, ideas and processes
Styles & Personality Types: be aware of different communication
styles and personality types

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Shale Oil Research Project Communication Plan

FIGURE 4.10
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 Key Terms
Cost account
Milestone
Organization breakdown structure (OBS)
Priority matrix
Process breakdown structure (PBS)
Project charter
Responsibility matrix
Scope creep
Scope statement
WBS dictionary
Work breakdown structure (WBS)
Work package
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