PM Session 4

Project Management Session 4

Project Definition

2

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Session Outcomes

• Following completion of the session the delegate should:– Understand the rationale and format of the SOW,

WBS and OBS;– Understand how the above relate to resource

allocation.• In addition the delegate should be able to develop a basic SOW and WBS, using an appropriate case study.

3

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Preamble

4

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Defining the Project

• One of the best ways to meet the needs of stakeholders is through an integrated, planning and control system;

• Essentially breaking down of final deliverable, into the work that need to be performed;

• Further outlining the boundaries of what must be delivered and done and who is responsible.

5

Proj

ect D

efin

ition

Proj

ect D

efin

ition


6

Proj

ect D

efin

ition

Proj

ect D

efin

ition


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.

7

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Step 1: 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;

– Draws boundaries for the project.

8

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Scope Checklist1. Project objective

• End customer’s needs drive the objective;

• A project makes a “promise” – value proposition;

2. Deliverables• Practically the final deliverable and the

deliverable that directly link to this;

3. Milestones• Major events;

4. Technical requirements• Key technical requirements;

5. Limits and exclusions• What is clearly inside and outside the

scope of the project;• What are the assumptions;• What are the constraints or limitations;

6. Reviews with customer• Reporting and review of deliverables,

budgets etc.

9

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Scope: Terms and Definitions

• Scope Statement:– 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;• Project Creep:

–The tendency for the project scope to expand over time due to changing requirements, specifications, and priorities.

10

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Scope: Example of Charter

11

Proj

ect D

efin

ition

Proj

ect D

efin

ition


12

Proj

ect D

efin

ition

Proj

ect D

efin

ition


13

Proj

ect D

efin

ition

Proj

ect D

efin

ition


14

Proj

ect D

efin

ition

Proj

ect D

efin

ition


Project ManagerThe individual responsible for managing the work

CustomerThe individual or organization who will use the product“customer is always right”

Performing OrganizationThe enterprise whose employees are most likely directly involved in doing the work of the project

SponsorThe individual or group within the performing organization who provides the financial resources, in cash or in kind, for the project

• Individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or

successful project completion

15

Proj

ect D

efin

ition

Proj

ect D

efin

ition


Interest in the project

Abilit

y to

influ

ence

the

outc

ome

Low

High

High

Inform

Consult Negotiate

Enable

16

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Practical Exercise

Write a project scope statement for the following project (see video clip)

17

Proj

ect D

efin

ition

Proj

ect D

efin

ition







18

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Step 2: Establishing Project Priorities• Causes of Project Trade-offs:

– Shifts in the relative importance of criteria related to cost, time, and performance parameters:

• Budget–Cost;• Schedule–Time;• Performance–Scope;

• Managing the Priorities of Project Trade-offs:– Constraint: a parameter is a

fixed requirement;– Enhance: optimizing a

parameter over others;– Accept: reducing (or not

meeting) a parameter requirement.

19

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Management Trade-offs

20

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Priority Matrix

21

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Time Limited (Constrained) Project

Time

Resources(Inc Cost)

22

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Resource Limited (Constrained) Project

Resources(Inc Cost)

Time

23

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Over Determined Project

Resources(Inc Cost)

Time

Scope

24

Proj

ect D

efin

ition

Proj

ect D

efin

ition







25

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Step 3: Creating the Work Breakdown Structure

• Work Breakdown Structure (WBS):

– A hierarchical outline (map) that identifies the products (deliverables) 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 (collection of elements related to work that must be done);

– Best suited for design and build projects that have tangible outcomes rather than process-oriented projects.

26

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Step 3: Creating the Work Breakdown Structure

• Very important for understanding the WBS:– Aim is to break down (decompose):

• Final deliverable; to

• Sub deliverables; to

• Work package;

– Deliverable – already delivered, past tense, does not consume resources;

– Work package – doing, verb, consume resources and time.

27

Proj

ect D

efin

ition

Proj

ect D

efin

ition

28

Proj

ect D

efin

ition

Proj

ect D

efin

ition

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.

29

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Work Breakdown Structure

30

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Work Packages

• A work package is the lowest level of the WBS;– It is output-oriented (not output in itself) in that it:

• Defines work (what);

• Identifies time to complete a work package (how long);

• Identifies a time-phased budget to complete a work package (cost – linked to a cost centre);

• Identifies resources needed to complete a work package (how much);

• Identifies a single person responsible for units of work (who);

• Identifies monitoring points (milestones) for measuring success;

• Roughly 10 days maximum (80 hours) – experience shows.

31

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Practical Exercise

• Develop a WBS for an Airbus 340 passenger aircraft – see Google Video.

32

Proj

ect D

efin

ition

Proj

ect D

efin

ition







33

Proj

ect D

efin

ition

Proj

ect D

efin

ition

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 the organizational units to cost control accounts.

34

Proj

ect D

efin

ition

Proj

ect D

efin

ition

35

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Direct Labor Budget Sorted By WBS

36

Proj

ect D

efin

ition

Proj

ect D

efin

ition







37

Proj

ect D

efin

ition

Proj

ect D

efin

ition

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

38

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Practical Demonstration

39

Proj

ect D

efin

ition

Proj

ect D

efin

ition

40

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Work Package Estimates

41

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Project Roll-up

• Cost Account:

– The intersection of the WBS and the OBS that is a budgetary control point for work packages;

– Used to provide a roll-up (summation) of costs incurred over time by a work package across organization units and levels, and by deliverables.

42

Proj

ect D

efin

ition

Proj

ect D

efin

ition

43

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Process Breakdown Structure

• Process-Oriented Projects:– Are driven by performance requirements in which the final

outcome is the product of a series of steps of phases in which one phase affects the next phase;

• Process Breakdown Structure (PBS):– Defines deliverables as outputs required to move to the

next phase– Checklists for managing PBS:

• Deliverables needed to exit one phase and begin the next;

• Quality checkpoints for complete and accurate deliverables;

• Sign-offs by responsible stakeholders to monitor progress.

44

Proj

ect D

efin

ition

Proj

ect D

efin

ition

PBS for Software Project Development

45

Proj

ect D

efin

ition

Proj

ect D

efin

ition

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.

46

Proj

ect D

efin

ition

Proj

ect D

efin

ition

Responsibility Matrix for a Market Research Project

PM Session 4

Business