Topic 4-1:

DEFINING A PROJECT

Instructor: Dr. Nguyen Thi Duc Nguyen 1

 STEPS OF
DEFINING THE PROJECT

Defining the Project

Step 1: Defining the Project Scope
Step 2: Establishing Project Priorities
Step 3: Creating the Work Breakdown Structure (WBS)
Step 4: Integrating the WBS with the Organization
Step 5: Coding the WBS for the Information System

Instructor: Dr. Nguyen Thi Duc Nguyen 2

 Step 1: Defining the Project Scope

1. 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.
2. 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.

Project Scope Checklist

1. Project objective
2. Deliverables
3. Milestones
4. Technical requirements
5. Limits and exclusions
6. Reviews with customer

Instructor: Dr. Nguyen Thi Duc Nguyen 3

 Project Scope: Terms and Definitions

Scope Statements
• Is a short, one- to two-page summary of key elements of the scope,
followed by extended documentation of each element.
• Is also referred to as “statements of work (SOWs)”
Project Charter
• Is a documentation that authorizes the project manager to initiate
and lead the project.
• Often includes a brief scope description as well as such items as
risk limits, business case, spending limits, and even team
composition.
Scope Creep
• Is the tendency for the project scope to expand over time—usually
by changing requirements, specifications, and priorities.
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Step 2: Establishing Project Priorities

1. 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
2. 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.

Instructor: Dr. Nguyen Thi Duc Nguyen 4

 Project Management Trade-offs

FIGURE 4.1
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Project Priority Matrix

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Instructor: Dr. Nguyen Thi Duc Nguyen 5

 Step 3: Creating the Work Breakdown Structure
1. 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 sub-deliverables, 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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Instructor: Dr. Nguyen Thi Duc Nguyen 6

 How WBS Helps the Project Manager

WBS
Helps manage plan, schedule, and budget.
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
Defines communication channels and assists in
coordinating the various project elements.

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Work Breakdown Structure

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Instructor: Dr. Nguyen Thi Duc Nguyen 7

 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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Each Work Package in the WBS

• 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 for measuring progress (how well).

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Instructor: Dr. Nguyen Thi Duc Nguyen 8

 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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Instructor: Dr. Nguyen Thi Duc Nguyen 9

 Direct Labor Budget Sorted By WBS

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Direct Labor Budget Sorted by OBS

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Instructor: Dr. Nguyen Thi Duc Nguyen 10

 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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Instructor: Dr. Nguyen Thi Duc Nguyen 11

 RESPONSIBILITY MATRICES

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Responsibility Matrices
1. 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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Instructor: Dr. Nguyen Thi Duc Nguyen 12

 Responsibility Matrix for a Market Research Project

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Responsibility Matrix for the

Conveyor Belt Project

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Instructor: Dr. Nguyen Thi Duc Nguyen 13

 PROJECT ROLL-UP

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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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Instructor: Dr. Nguyen Thi Duc Nguyen 14

 Direct Labor Budget Rollup (000)

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PROCESS

BREAKDOWN

STRUCTURE
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Instructor: Dr. Nguyen Thi Duc Nguyen 15

 Process Breakdown Structure
Process-oriented project
• 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.

• A project that the final outcome is a product of a series of steps and

phases.
• A project that evolves over time with each phase affecting the next
phase.
• A project that is driven by performance requirements, not by
plans/blueprints.

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Process Breakdown Structure

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.

• Is used for process-oriented projects.

• Is often referred to as the “waterfall method” in the software
industry.

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Instructor: Dr. Nguyen Thi Duc Nguyen 16

 Ex: PBS for Software Development Project

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Key Terms
Cost account

Milestone

Organization breakdown
structure (OBS) Responsibility matrix

Priority matrix Scope creep

Process breakdown structure Scope statement

(PBS) Work breakdown

structure (WBS)

Work package

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Instructor: Dr. Nguyen Thi Duc Nguyen 17