Project Management

Quản lý Dự án
Dr. TRAN QUYNH LE
Dr. NGUYEN DUC DUY
Industrial Systems Engineering Department
Mechanical Engineering Faculty
Ho Chi Minh City University of Technology (HCMUT)–
VNUHCM
 Chapter 4
Defining the Project

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 LEARNING OUTCOME

After learning this chapter you should be able to:

• Identify key elements of a project scope statement
• 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
• Demonstrate how the organization breakdown structure (OBS)
establishes accountability to organization units.
• Describe a process breakdown structure (PBS)

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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—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.

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Project Scope Checklist
1. Project objective
2. Product scope description
3. Justification
4. Deliverables
5. Milestones
6. Technical requirements
7. Limits and exclusions
8. Acceptance criteria

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Project Scope Checklist-Example

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Project Scope Checklist-Example

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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.
▪ Project Creep
• The tendency for the project scope to expand over time due to changing
requirements, specifications, and priorities.

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Project Scope: Terms and Definitions
Five of the most common causes of scope creep
1. Poor requirement analysis. Customers often don’t really know what they want.
“I’ll know it when I see it” syndrome contributes to wasted effort and ambiguity.
2. Not involving users early enough. Too often project teams think they know up
front what the end user needs, only to find out later they were mistaken.
3. Underestimating project complexity. Complexity and associated uncertainty
naturally lead to changes in scope, since there are so many unknowns yet to be
discovered.
4. Lack of change control. A robust change control process is needed to ensure
that only appropriate changes occur in the scope of the project.
5. Gold plating. Gold plating refers to adding extra value to the project that is
beyond the scope of the project. This is common on software projects where
developers add features that they think the end user will like.

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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: a parameter is a fixed requirement.
• Enhance: optimizing a parameter over others.
• Accept: reducing (or not meeting) a parameter requirement.

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Project Management Trade-offs

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Project Priority Matrix

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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.

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Hierarchical Breakdown
of the WBS

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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

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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 single person responsible for units of work (who)
➢ Identifies monitoring points (milestones) for measuring success.

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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.

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Integration of WBS and OBS

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Direct Labor Budget Sorted By WBS

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Direct Labor Budget Sorted by OBS

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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

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WBS Coding

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Work Package Estimates

FIGURE 4.6

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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.

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Direct Labor Budget Rollup (000)

FIGURE 4.7

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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.

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PBS for Software Project Development

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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.
➢ 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.

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Responsibility Matrix for a Market Research Project

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Responsibility Matrix for the Conveyor Belt Project

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Key Terms
▪ Cost account
▪ Milestone
▪ Organization breakdown structure (OBS)
▪ Scope creep
▪ Priority matrix
▪ Responsibility matrix
▪ Scope statement
▪ Process breakdown structure (PBS)
▪ Work breakdown structure (WBS)
▪ Work package

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