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Chapter Four
Defining the Project

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 Where We Are Now

© McGraw-Hill Education 2
 Learning Objectives

04-01 Identify key elements of a project scope statement and understand

why a complete scope statement is critical to project success.
04-02 Describe the causes of scope creep and ways to manage it.
04-03 Understand why it is important to establish project priorities in terms
of cost, time, and performance.
04-04 Demonstrate the importance of a work breakdown structure (WBS)
to the management of projects and how it serves as a database for
planning and control.
04-05 Demonstrate how the organization breakdown structure (OBS)
establishes accountability to organization units.
04-06 Describe a process breakdown structure (PBS) and when to use it.
04-07 Create responsibility matrices for small projects.
04-08 Create a communication plan for a project.
© McGraw-Hill Education 3
 Chapter Outline

4.1 Step 1: Defining the Project Scope

4.2 Step 2: Establishing Project Priorities
4.3 Step 3: Creating the Work Breakdown Structure
4.4 Step 4: Integrating the WBS with the Organization
4.5 Step 5: Coding the WBS for the Information System
4.6 Process Breakdown Structure
4.7 Responsibility Matrices
4.8 Project Communication Plan

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 Five General Steps for Defining Project Phase

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

© McGraw-Hill Education 5
 4.1 Step 1: Defining the Project Scope

Project Scope Defined

• Is a definition of the end result or mission of your project—a product or
service for your client/customer.
• Defines the results to be achieved in specific, tangible, and measurable
terms.
• Example: Build a house
Purposes of the Project Scope Statement
• To clearly define the deliverable(s) for the end user (Design a prototype)
• To direct focus on the project purpose(reason of project existence)
throughout the life of the project for the customer and project participants
• To be published and used by the project owner and project participants for
planning and measuring project success

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 THE SCOPE STATEMENT SHOULD INCLUDE:

A project scope statement is a clear definition of the boundaries of a

project.
The boundaries of the project (what is and what is not included)
The responsibilities of each team and the individual team members
The procedures for completing each step of the project
How each step will be verified and approved

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 Project Scope Checklist

1. Project objective : outline the targets of your business wants to cover within this
project. Example: to build a pool enclosure fences.
2. Project Scope description: A detailed description of the product to be produced.
3. Justification: is about trying to explain why we need to implement a particular
solution to the problem we have narrated above.
4. Deliverables :define the deliverable your team needs to work on producing to
meet the set of objectives.
5. Milestones : A milestone is a significant event in a project that occurs at a point in
time. Example : completing the task within 3 days instead of one week. Project
approval.
Milestone is a point of progress on the project timeline.
6. Technical requirements :technical requirements to ensure proper
performance. Technical requirements typically clarify either the
deliverables or define the performance specifications.

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 Project Scope Checklist

You can also think of them as moments in time. Milestones usually signify
important steps in the development that must be achieved for the project to
turn out a success (i.e., to deliver satisfactory deliverables on time and within
budget).

Milestones are not project deliverables. A deliverable is a product or service

but a milestone is a point in time. For example, hand cream is a deliverable in
the cosmetics company’s new project. Confirming and approving the hand
cream formula before sending it to production is a milestone.
Project milestones example: website development
Website structure approval by March 1
All texts are written by March 20
Design Approval by March 29
Programming Finished by April 19
QA Testing is done by April 29

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 Project Scope Checklist

7. Limits and exclusions: The limits of scope should be defined. Failure

to do so can lead to false expectations and to expending resources
and time on the wrong problem.
Example: work can’t start until after 8:00 a.m.
8. Acceptance Criteria: Completion of the scope checklist ends with a
review with your customer—internal or external.

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 Example

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 Project Scope Example

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 Project Scope: Terms and Definitions

Scope Statements
• Is a short, one- to two-page summary of key elements of the scope,
followed by extended documentation of each element.
• Is also referred to as “statements of work (SOWs)”
Project Charter
• Is a documentation that authorizes the project manager to initiate and
lead the project. The charter contains an overview of the project scope
and the project scope statement breaks it down into more detail.
Scope Creep
• Is the tendency for the project scope to expand over time—usually by
changing requirements, specifications, and priorities.
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 Five of the Most Common Causes of Scope Creep

• Poor requirement analysis

• Not involving users early enough
• Underestimating project complexity
• Lack of change control

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 4.2 Step 2: Establishing Project Priorities

Three major criteria (trade-offs) that a project manager has to manage are:
• Cost (budget)
• Time (schedule)
• Performance (scope)
A project manager can manage the project trade-offs by completing a priority matrix
for the project and identifying which criterion is:
• Constrain—original parameter is fixed. The project must meet the completion
date, specifications and scope of the project, or budget/resources limitation.

• Enhance— Given the project scope, which standards should be optimized. In the
case of time and cost, enhancing meaning adding value to the project.
• Accept— for which standards is to be tolerable not to meet the original
parameters. In most of the projects at least one of the three constraints belongs to
the first category.

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 Project Management Trade-offs

© McGraw-Hill Education FIGURE 4.1 16

 Project Priority Matrix for the Development of a New Wireless
Router

© McGraw-Hill Education FIGURE 4.2 17

 4.3 Step 3: Creating the Work Breakdown Structure

Work Breakdown Structure (WBS)

• Is a hierarchical outline of the project with different levels of detail.
• Identifies the products and work elements involved in a project.
• Defines the relationship of the final deliverable (the project) to its sub-
deliverables, and, in turn, their relationships to work packages.
• Serves as a framework for tracking cost and work performance.
• Is 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.

© McGraw-Hill Education FIGURE 4.3 19

 How WBS Helps the Project Manager

• Assures 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.
• Facilitates the evaluation of cost, time, and technical performance at all levels in the
organization over the life of the project.
• Provides management with information appropriate to each organizational level.
• Helps project managers to plan, schedule, and budget the project.
• Helps in the development of the organization breakdown structure (OBS), which
assigns project responsibilities to organization units and individuals.
• Provides the opportunity to “roll up” (sum) the budget and actual costs of the
smaller work packages into larger work elements.
• Defines communication channels and assists in understanding and coordinating
many parts of the project.
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 Work Breakdown Structure

© McGraw-Hill Education FIGURE 4.4 21

 A Work Package

• Is the lowest level of the WBS.

• Is a short-duration task that has a definite start and stop point,
consumes resources, and represents cost.
• Should not exceed 10 workdays or one reporting period.
• Should be as independent of other work packages of the project as
possible.
• Is the basic unit used for planning, scheduling, and controlling the
project.

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 Each Work Package in the WBS

• Defines work (what).

• Identifies time to complete a work package (how long).
• Identifies a time-phased budget to complete a work package (cost).
• Identifies resources needed to complete a work package (how many).
• Identifies a single person responsible for units of work (who).
• Identifies monitoring points for measuring progress (how well).

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 4.4 Step 4: Integrating the WBS with the Organization

Organization Breakdown Structure (OBS)

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

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 Integration of WBS and OBS

© McGraw-Hill Education FIGURE 4.5 25

 4.5 Step 5: Coding the WBS for the Information System

WBS Coding System

• Defines
• Levels and elements in the WBS
• Organization elements
• Work packages
• Budget and cost information
• Allows reports to be consolidated at any level in the structure.
WBS Dictionary
• Provides detailed information about each element in the WBS.

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 Coding the WBS

© McGraw-Hill Education EXHIBIT 4.1 27

 4.6 Process Breakdown Structure

Process Breakdown Structure (PBS)

• Is used for process-oriented projects.
• Is often referred to as the “waterfall method” in the software industry.
Process-oriented project When to use it:
• Is a project that the final outcome is a product of a series of steps and
phases.
• Is a project that evolves over time with each phase affecting the next
phase.
• Is a project that is driven by performance requirements, not by
plans/blueprints.

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 PBS for Software Development Project

© McGraw-Hill Education FIGURE 4.6 29

 4.7 Responsibility Matrices

Responsibility Matrix (RM)

• Is also called a linear responsibility chart.
• Summarizes the tasks to be accomplished and who is responsible for what
on the project.
• Lists all the project activities and the participants responsible for each
activity.
• Clarifies interfaces between units and individuals that require coordination.
• Provides a mean for all participants in a project to view their
responsibilities and agree on their assignments.
• Clarifies the extent or type of authority exercised by each participant.

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 Responsibility Matrix for a Market Research Project

© McGraw-Hill Education FIGURE 4.7 31

 4.8 Project Communication Plan

Project communication plans address the following questions:

• 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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 Steps for Developing a Communication Plan

1. Stakeholder analysis—identify the target groups. who needs project

information to make decisions and/or contribute to project
progress.

2. Information needs—project status reports, deliverable issues, changes

in scope, team status meetings, gating decisions, accepted
request changes, action items, milestone reports, etc.
3. Sources of information—where does the information be present in?
4. Distribution modes—hardcopy, e-mail, teleconferencing,
SharePoint, and a variety of database sharing programs.
5. Responsibility and timing—determine who will send out the formation
and when.

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 Stakeholder Communications

© McGraw-Hill Education FIGURE 4.9 34

 Shale Oil Research Project Communication Plan

© McGraw-Hill Education FIGURE 4.10 35