Chapter 4: Project Scope Management

adopted from PMIs PMBOK 2000 and Textbook : Information Technology Project Management (author : Dr. Kathy Schwalbe)

Contents
Importance of scope management Project Scope Management Processes (Initiation, Scope planning, Scope definition, Scope verification, Scope change control)
Initiation (init phase)
key tools: selecting project based on financial methods (NPV, ROI and Payback analysis)

Scope Planning (planning phase) Scope definition (planning phase) Scope verification (control phase) Scope change control (control phase) methods to improve

Screening a project

What is Project Scope Management?

Scope refers to all the work involved in creating the products of the project and the processes used to create them Project scope management includes the processes involved in defining and controlling what is or is not included in the project The project team and stakeholders must have the same understanding of what products will be produces as a result of a project and what processes will be used in producing them
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Project Scope Management Processes

Initiation: beginning a project or continuing to the next phase Scope planning: developing documents to provide the basis for future project decisions Scope definition: subdividing the major project deliverables into smaller, more manageable components Scope verification: formalizing acceptance of the project scope Scope change control: controlling changes to project scope
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Project Initiation: Strategic Planning and Project Selection

1st initiation phase process Initiation is the process of formally authorizing a project or that an existing project should continue on the next phase.
The first step in initiating projects is to look at the big picture or strategic plan of an organization Strategic planning involves determining long-term business objectives IT projects should support strategic and financial business objectives
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Inputs to Project Initiation

Product description
documents the characteristics of the products or service that the project was undertaken to solve. It also documents the business need that created the project.

Strategic plan
describes the originations mission, vision, and goals for the future. Everything in projects management supports the strategic business plan of the origination.

Project selection criteria

defined in terms of the product, this covers the full range of management concerns. They are typically defined in terms of specific benefits of the project to the business.

Historical information
results of previous decisions and performance. For example: a) relevant lessons learned from past projects; b) the history with a particular customer; c) the history with similar projects.

Identifying Potential Projects

Many organizations follow a planning process for selecting IT projects First develop an IT strategic plan based on the organizations overall strategic plan Then perform a business area analysis Then define potential projects Then select IT projects and assign resources
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Tools & techniques

Project selection methods
they are techniques, practices or procedures for selecting a project that best supports the organizations objectives. Project selection methods generally fall into two broad categories:
a) benefit measurement methods corporative approaches, scoring models, and benefit-contribution and entomic models; b) constrained optimization methods mathematical models using linear, dynamic, integer, and multi-objective programming algorithms.

Expert judgment
Subject experts with specialized knowledge or training assess the inputs to this process. Results of this analysis are a documented opinion or recommendation.
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Methods for Selecting IT Projects

There are usually more projects than available time and resources to implement them It is important to follow a logical process for selecting IT projects to work on It is often difficult to provide strong justification for many IT projects, but everyone agrees they have a high value It is better to measure gold roughly than to count pennies precisely Three important criteria for projects:
There is a need for the project There are funds available Theres a strong will to make the project succeed
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Categorizing IT Projects
One categorization is whether the project addresses
a problem an opportunity, or a directive

Another categorization is how long it will take to do and when it is needed Another is the overall priority of the project
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Financial Analysis of Projects

Financial considerations are often an important consideration in selecting projects Three primary methods for determining the projected financial value of projects:
Net present value (NPV) analysis Return on investment (ROI) Payback analysis
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Net Present Value Analysis

Net present value (NPV) analysis
a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time

If financial value is a key criterion

projects with a positive NPV should be considered the higher the NPV, the better
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Figure 4-2. Net Present Value Example

Excel file

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Return on Investment
Return on investment (ROI) is income divided by investment
ROI = (total discounted benefits - total discounted costs) / discounted costs

The higher the ROI, the better Many organizations have a required rate of return or minimum acceptable rate of return on investment for projects
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Payback Analysis
payback analysis
is another important financial consideration Payback occurs when the cumulative discounted benefits and costs are greater than zero

Payback period is the amount of time it will take to recoup, in the form of net cash inflows, the net dollars invested in a project Many organizations want IT projects to have a fairly short payback period
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Figure 4-3. NPV, ROI, and Payback Analysis for Project 1

Excel file

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Figure 4-4. NPV, ROI, and Payback Analysis for Project 2

Excel file

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Weighted Scoring Model

No single methods is the best for all, a holistic evaluation of previous methods can be combined! A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria
First identify criteria important to the project selection process Then assign weights (percentages) to each criterion so they add up to 100% Then assign scores to each criterion for each project Multiply the scores by the weights and get the total weighted scores

The higher the weighted score, the better

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Figure 4-5. Sample Weighted Scoring Model for Project Selection

Excel file

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Project Charters
After deciding what project to work on, it is important to formalize projects A project charter
a document that formally recognizes the existence of a project and provides direction on the projects objectives and management

Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project
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Sample Project Charter

Project Title: Information Technology (IT) Upgrade Project Project Start Date: March 4, 200 Projected Finish Date: December 4, 2002 Project Manager: Kim Nguyen, 691-2784, [email protected] Project Objectives: Upgrade hardware and software for all employees (approximately 2,000) within 9 months based on new corporate standards. See attached sheet describing the new standards. Upgrades may affect servers and midrange computers as well as network hardware and software. Budgeted $1,000,000 for hardware and software costs and $500,000 for labor costs. Approach:
Update the IT inventory database to determine upgrade needs Develop detailed cost estimate for project and report to CIO Issue a request for quotes to obtain hardware and software Use internal staff as much as possible to do the planning, analysis, and 22 installation

Table 4-2. Sample Project Charter (continued)

Roles and Responsibilities:
Name Walter Schmidt, CEO Mike Zwack Kim Nguyen Jeff Johnson Nancy Reynolds Role Project Sponsor CIO Project Manager Director of IT Operations VP, Human Resources Responsibility Monitor project Monitor project, provide staff Plan and execute project Mentor Kim Provide staff, issue memo to all employees about project Assist in purchasing hardware and software

Steve McCann

Director of Purchasing

Sign-off: (Signatures of all above stakeholders) Comments: (Handwritten comments from above stakeholders, if applicable) This project must be done within ten months at the absolute latest. Mike Zwack, CIO We are assuming that adequate staff will be available and committed to supporting this project. Some work must be done after hours to avoid work disruptions, and overtime will be provided. Jeff Johnson and Kim Nguyen, IT Information Technology Department

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Scope Planning
2nd of 21 planning phase process Score refers to the boundaries of the project. two approaches in scope planning: Top-down approach; Bottom-up approach.
In top-down approach, planning start with largest items, or most-generalized description, of the project and break them down to the finest level of detail. In bottom-up approach, planning start with the detailed tasks and roll them up to higher levels of detail
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Input to Scope Planning

Product description
Documents the characteristics of the project or service that the project will create. It is less detailed in the early phases.

Project Charter
The document that formally recognizes the existence of a project. It is issued by a manager who is external to the project and at a level appropriate to the needs of the project.

Constraints
factors that limit the project management teams options

Assumption
factors that, for planning purposes, will be considered to be true, real, or certain.
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Tools for Scope Planning

Product analysis
involves developing a better understanding of the product of the project. It includes techniques such as system engineering, value engineering, value analysis, function analysis, and quality function deployment.

Benefit/cost analysis
estimating tangible and intangible costs and benefits or various alternatives and using financial measures to assess the relative desirability of their alternatives.

Alternative identification
any technique used to general different approaches to the project (e.g. brainstorming or lateral thinking)

Expert judgment
may be provided by subject experts with specialized knowledge or training.
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Output from Scope Planning

Scope statement
provides a documented basis for making future project decisions and for confirming or developing common understanding of project scope. The scope statement is an agreement made between the client and project manager. Major sections of the scope statement include: a) Project justification; b) Project product; c) Project deliverables; d) Project objectives.

Supporting details
include all identified assumptions and constraints. The specifications define the expected performance of a deliverable.

Scope Management Plan

describe how the project scope will be managed and how scope changes will be integrated into the project. It may be formal or informal.
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Scope definition
3rd of 21 planning phase process After completing scope planning, the next step is to further define the work by breaking it into manageable pieces Scope definition divides major project deliverables into manageable components. It provides a baseline and assigns responsibilities. A scope baseline is the original plan, plus or minus approved changes. Good scope definition
helps improve the accuracy of time, cost, and resource estimates defines a baseline for performance measurement and project control aids in communicating clear work responsibilities Chapter 4

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Inputs to Scope definition

Scope statement
The scope statement is an agreement made between the client and project manager. It is an output from Scope Planning Process.

Constraints
factors that limits other options

Assumptions
factors that are considered to be true, real, or certain.

Other planning output

Outputs from processes in other knowledge areas should be reviewed for possible impact on project scope definition.

Historic information
information from similar or previous projects.
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Tools & techniques for Scope definition

WBS template
use templates from previous project for a new project.

Decomposition
subdividing the major project deliverables into smaller, more manageable components.

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Outputs of Scope definition

WBS
A fundamental project document that has a great emphasis in project management methodology. It provides the basis for planning and management the project. It is a deliverable-oriented grouping of project elements that organizes and defines the total scope of the project. Work not contained in the WBS is outside the scope of the project.

Scope statement update

refinements of the scope statement.
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Figure 4-6a. Sample Intranet WBS Organized by Product

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Figure 4-6b. Sample Intranet WBS Organized by Phase

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Table 4-3. Intranet WBS in Tabular Form

1.0 Concept 1.1 Evaluate current systems 1.2 Define Requirements 1.2.1 Define user requirements 1.2.2 Define content requirements 1.2.3 Define system requirements 1.2.4 Define server owner requirements 1.3 Define specific functionality 1.4 Define risks and risk management approach 1.5 Develop project plan 1.6 Brief web development team 2.0 Web Site Design 3.0 Web Site Development 4.0 Roll Out 5.0 Support

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Figure 4-7. Intranet WBS and Gantt Chart in Project 2000

Project 98 file
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Figure 4-8. Intranet WBS and Gantt Chart Organized by Project Management Process Groups

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Approaches to Developing WBSs

Using guidelines
Some organizations, like the DOD, provide guidelines for preparing WBSs

The analogy approach

It often helps to review WBSs of similar projects

The top-down approach

Start with the largest items of the project and keep breaking them down

The bottoms-up approach

Start with the detailed tasks and roll them up
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Scope verification & Scope change control

It is very difficult to create a good scope statement and WBS for a project It is even more difficult to verify project scope and minimize scope changes Many IT projects suffer from scope creep and poor scope verification

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Scope Verification
2nd of 8 controlling phase process Scope verification is the process of formalizing acceptance of the project scope by key stakeholders, especially the customer and sponsor It requires reviewing work products and results to ensure that all product or service features and functions are complete, correct and satisfactory.

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Inputs to Scope Verification

Work results
deliverables have been fully or partially completed, as well as what costs have been incurred or committed. They are the outcome of activities performed and are fed into the performance reporting process.

Product documentation
any paperwork describing the projects products must be available for review.
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Tools & techniques for Scope Verification

Inspection
activities such as measuring, examining, and testing undertaken to determine if results conform to requirements. The purpose is to identify any particular on variances, omissions, deficiencies, gaps, and errors.

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Outputs from Scope Verification

Formal acceptance
documentation of approving the project of the project, or phase, needs to be prepared. Often the client or sponsor needs to sign off on formal documents as a part of wrapping up the project.

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Scope Change Control

3rd of 8 controlling phase process Change control procedures enable project manager to understand and manage change requests. Project manager need to control the scope of both the product and the project.
The big change requests are easy to spot because they happen all at once. When there are small multiple change requests, these are known as scope creep and it can be a difficult to detect.
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Inputs to Scope Change Control

WBS
a scope definition tool that organizes the work and provides a basis for project estimates.

Performance reports
alert the project team. Status reports describe the projects current standing. Progress report describes the teams accomplishment.

Change requests
the result of external events such as government regulations, error or omissions in scope definition, and value-added changes.

Scope management plan

part of the Project Plan. It describes how the project scope will be managed, how changes will be identified and classified, how changes will be integrated into the project, and what the required procedures are form making changes. 44

Tools & techniques for Scope Change Control

Scope change control system
defines the procedures by which the scope of the project may be changed. It includes the paperwork, tracking systems, and approval levels necessary for authorizing changes. (e.g. change request form)

Performance measurement
techniques to assess the magnitude of any variations that occur in the performance of the project.

Additional planning
activities that may be necessary to the project plan or subsidiary plan in order to adjust to changes.
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Outputs from Scope Change Control

Scope changes
any modifications to the authorized project scope as defined by the approved WBS. It often requires adjustments to cost, time, quality, or other project objectives.

Corrective action
anything that bring the performance back in line with the project plan.

Lessons learned
assessments that include the causes of variances, reasoning behind corrective actions, and other types of lessons learned as a result of scope change. 47

Table 4-4. Factors Causing IT Project Problems*

Factor Lack of user input Incomplete requirements and specifications Changing requirements and specifications Lack of executive support Technology incompetence Lack of resources Unrealistic expectations Unclear objectives Unrealistic time frames New Technology Rank 1 2 3 4 5 6 7 8 9 10

*Johnson, Jim, "CHAOS: The Dollar Drain of IT Project Failures," Application Development Trends, January 1995, www.stadishgroup.com/chaos.html

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Suggestions for Improving User Input

Insist that all projects have a sponsor from the user organization Have users on the project team Have regular meetings Deliver something to project users and sponsor on a regular basis Co-locate users with the developers
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Suggestions for Reducing Incomplete and Changing Requirements

Develop and follow a requirements management process Employ techniques such as prototyping, use case modeling, and Joint Application Design to thoroughly understand user requirements Put all requirements in writing and current Create a requirements management database Provide adequate testing Use a process for reviewing requested changes from a systems perspective Emphasize completion dates
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Summary
Importance of scope management Project Scope Management Processes
Initiation Scope planning Scope definition Scope verification Scope change control

Initiation: selecting project

needs, category, financial (NPV, ROI and Payback analysis) and weight score
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Summary (2)
Scope planning
Charter to define objective key project stakeholders should agree and sign the charter

Scope definition
Scope statement, WBS is a tool to define scope

Scope verification and change control

very difficult, common problem in IT scope creep and change of user requirement

methods to improve:
prototyping, case modeling, put requirement in writing, provide adequate testing, incorporate change request review, emphasis on completion dates
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