Chapter Four

Defining the Project

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Where We Are Now

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Learning Objectives

Identify key elements of a project scope statement and understand why a complete scope statement is crucial to project success

Understand why it is important to establish project priorities in terms of cost, time, and performance

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

Demonstrate how the organization breakdown structure (OBS) establishes accountability to organizational units

Describe a process breakdown structure (PBS) and when to use it

Create responsibility matrices for small projects

Create a communication plan for a project

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Chapter Outline

4.1Step 1: Defining the Project Scope

4.2Step 2: Establishing Project Priorities

4.3Step 3: Creating the Work Breakdown

Structure

4.4Step 4: Integrating the WBS with the

Organization

4.5Step 5: Coding the WBS for the Information

System

4.6Process Breakdown Structure

4.7Responsibility Matrices

4.8Project Communication Plan

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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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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

Purposes of the Project 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

Project objective

Deliverables

Milestones

Technical requirements

Limits and exclusions

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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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: original parameter is a fixed requirement.

Enhance: optimizing a criterion over others

Accept: reducing (or not meeting) a criterion requirement

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FIGURE 4.1

Project Management Trade-offs

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Project Priority Matrix

FIGURE 4.2

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Step 3:Creating the WorkBreakdown Structure

Work Breakdown Structure (WBS)

A 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

FIGURE 4.3

* 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).

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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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Work Breakdown Structure

FIGURE 4.4

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Work Packages

A work package is the lowest level of the WBS.

It is output-oriented 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).

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

Identifies a person responsible for units of work (who).

Identifies monitoring points for measuring success (how well).

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Step 4:Integrating the WBSwith 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 unit work 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

WBS Dictionary

Provides detailed information about each element in the WBS.

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Coding the WBS

EXHIBIT 4.1

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Process Breakdown Structure (PBS) forSoftware Development Project

FIGURE 4.6

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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 responsible for each activity.

Clarifies critical interfaces between units and individuals that need coordination.

Provide a 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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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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Developing a Communication Plan

Stakeholder analysis

Information needs

Sources of information

Dissemination modes

Responsibility and timing

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Stakeholder Communications

FIGURE 4.9

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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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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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