Lecture Week 3b The Project

CHAPTER FOUR
Defining
the Project
Copyright © 2014 McGraw-Hill Education.

All Rights Reserved.
PowerPoint Presentation by Charlie Cook

Where We Are Now
4–2
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
4–3
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.
4–4
Project Scope Checklist
1. Project objective
2. Deliverables
3. Milestones
4. Technical requirements
5. Limits and exclusions
6. Reviews with customer
4–5
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.
4–6
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.
4–7
Project Management Trade-offs
FIGURE 4.1
4–8
Project Priority Matrix
FIGURE 4.2
4–9
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.
4–10
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
4–11
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.
4–12
Work Breakdown Structure
FIGURE 4.4
4–13
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.
4–14
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.
4–15
Integration of
WBS and OBS
FIGURE 4.5
4–16
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
4–17
Coding
the WBS
EXHIBIT 4.5
4–18
PBS for Software Development Project
FIGURE 4.6
4–19
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.
4–20
Responsibility Matrix for a Market Research Project
FIGURE 4.7
4–21
Responsibility Matrix for the Conveyor Belt Project
FIGURE 4.8
4–22
Stakeholder Communications
FIGURE 4.9
4–23
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?
4–24
Information Needs
• Project status reports

• Deliverable issues
• Changes in scope
• Team status meetings
• Gating decisions
• Accepted request changes
• Action items
• Milestone reports
4–25
Developing a Communication Plan
1. Stakeholder analysis
2. Information needs
3. Sources of information
4. Dissemination modes
5. Responsibility and timing
4–26
Shale Oil Research Project Communication Plan
FIGURE 4.10
4–27
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
4–28
Group discussion
4–29
Work in group and submit
4–30

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CHAPTER FOUR

Copyright © 2014 McGraw-Hill Education.

PowerPoint Presentation by Charlie Cook

Step 1: Defining the Project Scope

• Managing the Priorities of Project Trade-offs

• Work Breakdown Structure (WBS)

* This breakdown groups work

• Organizational Breakdown Structure (OBS)

• WBS Coding System

• Clarifies critical interfaces between units

• What information needs to be collected

• Project status reports

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