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Lecture 4: Defining the Project-I

Project Management
THE MANAGERIAL PROCESS

Clifford F. Gray
Eric W. Larson
Third Edition

Chapter 4

Defining the Project

Defining the Project


Step 1:

Project Information Collection

Step 2:

Defining the Project Scope Statement

Step 3:

Establishing Project Priorities

Step 4:

Establishing Project Success Criteria

Step 5:

Creating the Work Breakdown Structure

Step 6:

Integrating the WBS with the Organization

Step 7:

Coding the WBS for the Information System

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Lecture 4: Defining the Project-I


Step 1: Project Information Collection
1. Project Brief
2. Financial Data
3. Miscellaneous Data

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Step 1: Project Information Collection


Sample Template
Project Information Collection

SAMPLE TEMPLATE

PROJECT BRIEF
Project Name: ________________________________________________________________
Project Code: ______________________

Project Priority: _________________________

Location: ____________________________________________________________________
Client: _____________________________

Consultant:_____________________________

Sub-Consultants: ________________________, ____________________________________


Project Manager: ______________________________________________________________
Start Date: _________________________

Finish Date: ___________________________

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Lecture 4: Defining the Project-I


Step 1: Project Information Collection
Sample Template
Project Information Collection

SAMPLE TEMPLATE

FINANCIAL DATA
Contract Date: ________________________________________________________________
Type of Contract: ______________________________________________________________
Contract Period: ______________________________________________________________
Cost of Project: _______________________________________________________________
Fund Source: ________________________________________________________________
Invoice Date: _______________________

Collection Period: _______________________

Who is responsible to prepare, sign and clear bills (invoices)?


__________________________________________________________________________
MISCELLANEOUS DATA
__________________________________________________________________________
__________________________________________________________________________

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Step 1: Project Information Collection


1. Project Brief
Project Name: As mentioned in Contract
Project Code:

Project
Number

Value of
the project

04-0151/ INF-IV/ V-3/ SD


Year of
Award

Type of
Project

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Completion
Period

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Lecture 4: Defining the Project-I


Step 1: Project Information Collection
1. Project Brief
Project Priority:
Project strategic significance

Lowest to Highest

1 to 5

Project value

1 Million to > 1000 Million

1 to 4

Project profit margin

<5% of value to > 20% of value

1 to 5

Project completion time

>10 years to < 1 Year

1 to 4

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Step 1: Project Information Collection


1. Project Brief
Location:

Specify Province, City and Area

Client:

Specify name of the owner of the project.

Consultants:

Specify Name of consultants


Specify Sub Consultant (if any)

Project Manager: Specify Name of Assigned Project Manager


Start Date:

Planned Start Date of Project

Finish Date:

Imposed Finish date (if any)

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Lecture 4: Defining the Project-I


Step 1: Project Information Collection
2. Financial Data
Contract Date

The contract initiation date

Type of Contract

Specify type of contract. E.g

1. Lump Sum Contract


2. Unit Priced Contract
3. Turnkey Contract
4. Construction Management
5. Build, Operate and Transfer

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Step 1: Project Information Collection


2. Financial Data
Contract Period:

The total contract period


[ number of approved calendar days]

Cost of Project:

The contract value of the project

Fund Source:

The source of fund for the projects or


from where you get the invoice

Invoice Date:

Periodic Progress Payment Date


(Usually the invoice is generated at the
end of first week of each month or as
specified in contract)

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Lecture 4: Defining the Project-I


Step 1: Project Information Collection
2. Financial Data
Collection Period: Receivable period after submission of invoice
Who is responsible to prepare, sign and clear bills (invoice)?
Specify the designated authority (Usually quantity surveyor or
contracts manager takes this responsibility)

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Step 1: Project Information Collection


3. Miscellaneous Data
Any other data pertaining to the project that may be significant
in identifying the project challenges/ complexities and other
planning considerations

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Lecture 4: Defining the Project-I


Step 2: Defining the Project Scope
Project Scope
A definition of the end result or mission of the
projecta 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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Step 2: Defining the Project Scope


Scope Statement Development Issues
Scope definition should be as brief as possible but
complete.
Close liaison with client is needed to develop a
complete scope statement.
As the project progresses, the scope statement may
need to be revised or refined to reflect approved
changes to the scope of the project.
Completion of the scope statement ends with a review
from the client. The main concern is understanding
and agreement of needs and expectations. Clear
communication in scope issues is imperative to avoid
claims or misunderstandings.
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Lecture 4: Defining the Project-I


Project Scope Checklist
1. Project Brief
2. Project Justification
3. Scope Inclusions
4. Constraints
5. Scope Exclusions
6. Miscellaneous
7. Project Approval

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Project Scope Statement


Sample Template
Project Scope Statement

SAMPLE TEMPLATE

PROJECT BRIEF
Project Name: _________________________________________________
Project Code: ________________

Project Manager: ______________

Client: ______________________

Consultant: ___________________

Start Date: ___________________

Finish Date: __________________

Cost of Project: _______________

Contract Period:______________

PROJECT JUSTIFICATION

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Lecture 4: Defining the Project-I


Project Scope Statement
Sample Template
SCOPE INCLUSIONS
Objectives

Deliverables

Milestones

CONSTRAINTS
SCOPE EXCLUSIONS
MISCELLANEOUS
PROJECT APPROVAL
Prepared By: _______________________
Approved By: _______________________

Date: ______________
Date: ______________

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Project Scope Statement


1. Project Brief
As discussed earlier, Project Brief consist of
Project Name

Project Manager

Project Code

Consultant

Client

Finish Date

Start Date

Contract Period

Cost of Project

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Lecture 4: Defining the Project-I


Project Scope Statement
2. Project Justification
The need the project was undertaken to address.
Project justification provides the basis for evaluating
future trade-offs.

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Project Scope Statement


3. Scope Inclusions
Objectives

Deliverables

The quantifiable criteria that must


be met for the project to be
considered successful.

Identify the major deliverables of


the project with their BOQ costs .

Project objectives must include


cost, time and quality measures.

Milestones

Project objectives should have an


attribute (e.g. cost) and an
absolute or relative value

Identify the Planned/ Imposed


targets for the major deliverables .

Un-quantified objectives (e.g.


customer satisfaction) entail high
risk to successful accomplishment
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Lecture 4: Defining the Project-I


Project Scope Statement
4. Constraints
Constraints are any hurdles in starting, progressing, or
finishing the project.
Examples may be
Land procurement ,
Human resource availability,
Material procurement issues,
Site accessibility and utility procurement,
Cash flow,
Specialty equipment requirement,
etc

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Project Scope Statement


5. Scope Exclusions
When known, scope exclusions should be identified.

Failure to do so can lead to false expectations and to expending


resources and time on the wrong problem.

Examples may be excavation work to be done but no backfill


included; material that will be provided by client, not the contractor;
a house that will be built but no security devices installed.

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Lecture 4: Defining the Project-I


Project Scope Statement
6. Miscellaneous
Any other data pertaining to the scope of the project that may be
significant in identifying the project challenges/complexities and
other planning considerations.

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Project Scope Statement


7. Project Approval
Add any signatures that are important for the approval of the
project

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Lecture 4: Defining the Project-I

CASE STUDY
A 100 unit housing colony construction project in a city
average location. Value of contracted works is 160 million
and the project is contracted to complete in 36 months using
fast track approach (design, procurement and construction).
Four construction categories: Category A Double storey
one unit houses with high class finish; Category B Double
storey one unit houses with normal finish; Category C
Double storey two unit houses; Category D Single storey
houses.

Scope Statement of Case Study


PROJECT JUSTIFICATION
To provide housing facility to lower and upper middle class
families in an approachable and developed city average location

PROJECT OBJECTIVES
To develop the residential colony within 36 months at cost not to
exceed 160 Million. The quality objectives for the four categories
are:
Category A: High-Class
Category B: Medium
Category C: Medium
Category D: Medium

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Lecture 4: Defining the Project-I


Scope Statement of Case Study
PROJECT DELIVERABLES
25 units in category A:
- 2160 sq-ft, double storey, one-unit, 2 bath, 3 bedroom, 1 drawing,
1 dining, 1 lounge, exclusively finished home
- A finished garage
25 units in category B:
- 2160 sq-ft, double storey, one-unit, 2 bath, 3 bedroom, 1 drawing,
1 dining, 1 lounge, normal finish home
- A finished garage
25 units in category C:
- 2160 sq-ft, double storey, separate unit, 21/2 bath, 3 bedroom,
1 drawing, 1 dining, 1 lounge, normal finish home
25 units in category D:
- 1080 sq-ft, single storey, 11/2 bath, 2 bedroom, 1 drawing and dining,
1 lounge, normal finish home
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Scope Statement of Case Study


PROJECT MILESTONES
Permits approved May 1, 2009
Category A completed April 30, 2010
Category B completed February 28, 2011
Category C completed October 31, 2011
Category D completed March 31, 2012
Final Inspection April 30, 2012
LIMITS AND EXCLUSIONS
The houses will be built to the specifications and design of the
original blueprints provided by the client.
Client responsible for land procurement.
Air conditioning is not included but pre-wiring is included.
Contractor reserves the right to contract out services to
approved sub-contractors.
Contractor responsible for sub-contracted work.
Site work limited to Monday through Saturday, 08:00 am to 05:00 pm.
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Lecture 4: Defining the Project-I


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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Step 3: Establishing Project Priorities


Causes of Project Trade-offs
Shifts in the relative importance of criterions related to
cost, time, and performance parameters
BudgetCost
ScheduleTime
PerformanceQuality

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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Lecture 4: Defining the Project-I


Project Management Trade-offs

FIGURE 4.1

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Project Priority Matrix

FIGURE 4.2

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Lecture 4: Defining the Project-I


Step 3: Establishing Project Priorities
Development Issues
The Manager needs to have a candid discussion with the
client to establish the relative importance of each criterion.
Constrain on all three criterion (time, cost and quality)
would put the construction manager in a highly inflexible
position.
There are likely to be natural limits to the extent managers
can constrain, enhance or reduce any one criterion.
Manager should document these limits as part of creating
the priority matrix.
During the course of a project, priorities may change. The
manager needs to be vigilant to anticipate/ accept the
change and make appropriate adjustments.
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Step 3: Establishing Project Priorities


Use
During the planning process, the Project Priority Matrix
is essential to make planning decisions as to the
selection of the right method and sequence of
operations.
During the execution stage, it provides a basis for
monitoring and evaluating project progress so that
appropriate corrective actions can be taken.

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Lecture 4: Defining the Project-I


Establishing Project Priority Index
Priority Parameter

Assessment

Value

1. Project strategic significance

Lowest

Low

Average

2. Project value

High

Highest

Between 1 and 10 million

Between 10 and 100 million

Between 100 and 1000 million

>1000 million

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Establishing Project Priority Index


Priority Parameter

Assessment

Value

3. Project profit margin

<5% of value

4. Project completion time

Between 5% and 10%

Between 10% and 15%

Between 15% and 20%

>20%

>10 years

3 years to 10 years

1 year to 3 years

<1 year

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Lecture 4: Defining the Project-I


Establishing Project Priority Index
Consider a project with following priority parameter values:
Project strategic significance:
Project value:
Project profit anticipation:
Project completion time:

3
2
3
4

Total value:

3+2+3+4 = 12

Project priority index:

priority value/ Max. project priority


= 12/18 = 0.66

Project Priority value (Range = 0 to 1000)


= 0.66 x 1000 = 660

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Step 4: Establishing Project Success Criteria


1. What is project success criteria?
2. Significance of Success Criteria
3. Defining Project Success
4. Development Issues
5. Guiding questions for developing success criteria
6. Project Critical Success Dimensions
7. Principal Success Categories
8. Success category Vs Measurable success criteria
9. Sample Template
10.Examples
11.Evaluating success
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Lecture 4: Defining the Project-I


What is Project Success Criteria?
Project Success Criteria is the measurable
project, management, team and business value
that will result from doing this project
It is a statement of value to be achieved, and
therefore, it provides a basis for project
management to request/ demand resources
(including cash) and senior management to
authorize the resources

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Significance of Success Criteria


Project success criteria answers the question.
"Why do we want to undertake this project?"
The best success criteria is to state clearly
bottom-line impact of the project.
This is expressed generally in terms of:
1. Increased profit margins
2. Higher net revenues
3. Increased market value
4. Improved productivity
5. Improved resource skill set
6. Reduced cost of operations
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Lecture 4: Defining the Project-I


Defining Project Success
Was your last project a success?
The answer may very well depend upon who is
asked, and their particular definition of success.
As a project manager, you may expect that if you
complete a project on time, within budget, and your
end-result works, that you will have achieved
success.
This seems logical, but it not always true.
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Defining Project Success


Consider this example.....
A project is completed on time, the end-result
works, and the budget was met, but the project
team had to work extra hours and every weekend
for two months because the project schedule was
overly aggressive and the project plan did not
properly account for problems.

Was this project a success....?


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Lecture 4: Defining the Project-I


Defining Project Success
The answer is likely something along the lines of "it
depends", "yes, but...." or "not in every respect".
Project success cannot be viewed from a single
perspective. Your end-users may not even know or
care that your project was not planned well as long as
the end-result works. But to your burnt-out project team,
that same project could hardly be called a success. If
the project team is burnt-out, the next project manager
who must rely on that same team for future successes
may have real cause for concern. Your ability to
consider a project a "success" will go well beyond
immediate budgets and deliverables.
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Defining Project Success


projects can be successful on many levels, and that
a failure on any particular level is not necessarily
determinative of overall success, or failure.
The true definition of project success arises from multiple
perspectives, and will vary from project to project.

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Lecture 4: Defining the Project-I


Defining Project Success
Any examination of success should not begin at the end of
a project, but at the very start. Success begins with
consensus amongst all project participants and
stakeholders.

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Defining Project Success


..... what will it take to make this project a success?
The answer to this question will form your success
criteria.
You need to know what you are working towards,
and you also need to know that everyone is on the
same page "success-wise".

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Lecture 4: Defining the Project-I


Development Issues
Success criteria should be created independently for
each project, and should be tailored to suit individual
project circumstances.

Success criteria should be simple & attainable. And,


once defined, they should also be ranked according to
priority.

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Guiding Questions for Developing Success


Criteria
1.

What are our indicators for successful completion of


project?

2.

How will we know when we have developed a


successful project deliverable?

3.

What are the various components of our task/process?

4.

What will our intermediate deliverables look like along


the way from initiation to successful completion?

5.

Do we have interim benchmarks?

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Lecture 4: Defining the Project-I


Project Critical Success Dimensions
Deliverables Success - relating to the end-result of the
project (products or services), including issues of quality and
fulfillment of requirements

Procedural Success - relating to the way the project was


organized, structured and managed, including timeliness, cost
control, effectiveness of the project plan, and adherence to
established project management standards

Staff Success - relating to the "human resource" elements of


the project, including resource utilization, staff perspectives,
interactions and team relationships

Business Success - relating to the business/ commercial


elements of the project, including repeat business, increased
revenue, increased market share, new market opportunities, and
technological development
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Principal Success Categories


1. Internal Project Objectives (efficiency during the project)
2. Benefit to Customer (effectiveness in the short term)
3. Direct Contribution (in the medium term)
4. Future Opportunity (in the long term)

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Lecture 4: Defining the Project-I


Principal Success Categories
1. Internal Project Objectives - efficiency during project
How successful was the project team in meeting its schedule
objectives?
How successful was the project team in meeting its budget
objectives?
How successful was the project team in managing any other
resource constraints?

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Principal Success Categories


2. Benefit to Customer (effectiveness in the short term)
Did the product meet its specified requirements of functional
performance and technical standards?
What was the projects impact on the customer, and what did the
customer gain?
Does the customer actually use the product, and are they satisfied
with it?
Does the projects product fulfill the customers needs, and/or
solve the problem?

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Lecture 4: Defining the Project-I


Principal Success Categories
3. Direct Contribution (in the medium term)
Has the new or modified product become an immediate business
and/or commercial success, has it enhanced immediate revenue
and profits?
Has it created a larger market share?

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Principal Success Categories


4. Future Opportunity (in the long term)
Has the project created new opportunities for the future, has it
contributed to positioning the organization consistent with its vision,
goals?
Has it created a new market or new product potential, or assisted in
developing a new technology?
Has it contributed additional capabilities or competencies to the
organization?

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Lecture 4: Defining the Project-I


Success Category Vs.
Measurable Success Criteria
SUCCESS CATEGORY

Internal Project Objectives


(Pre-completion)

Benefit to Customer
(Short term)

MEASURABLE SUCCESS CRITERIA


Meeting schedule
Within budget
Other resource constraints met
Project Management Control observed

Meeting functional performance


Meeting technical specifications & standards
Favorable impact on customer customer's gain
Fulfilling customer's needs
Solving a customer's problem
Customer is using product
Customer expresses satisfaction

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Success Category Vs.


Measurable Success Criteria
SUCCESS CATEGORY

Direct Contribution
(Medium term)

Future Opportunity
(Long term)

MEASURABLE SUCCESS CRITERIA

Immediate business and/or commercial success


Immediate revenue and profits enhanced
Larger market share generated
Resource Optimization realized

Will create new opportunities for future


Will position customer competitively
Will create new market
Will assist in developing new technology
Has, or will, add capabilities and
competencies

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Lecture 4: Defining the Project-I


Sample Template
Project Success Criteria Checklist
S. No.

Success Factor

Category

SAMPLE TEMPLATE
Measurable Success Criteria

Deliverables Success

Procedural Success

Staff Success

Business Success

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Examples
Project Success Criteria Checklist
S. No.

Success Factor

Category

SAMPLE TEMPLATE
Measurable Success Criteria

Deliverables Success
1.

The finishing quality of the


project should provide
compliance with international
standards.

Benefit to Client Fulfilling clients needs


Favorable impact on
client, clients gain
Client expresses
satisfaction

Procedural Success
1.

The project is to be
completed with no more than
10% schedule overruns.

Internal Project
Objectives
(PreCompletion)

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Meeting schedule

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Lecture 4: Defining the Project-I


Examples
Project Success Criteria Checklist
S. No.

Success Factor

Category

SAMPLE TEMPLATE
Measurable Success Criteria

Staff Success
1.

Staff resources will acquire


new skills as a result of the
project.

Future
Opportunity
(Long Term)

Has or will add


capabilities and
competencies

2.

Project overtime shall not


exceed estimations by more
than 5%.

Internal Project
Objectives
(PreCompletion)

Within budget

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Examples
Project Success Criteria Checklist
S. No.

Success Factor

Category

SAMPLE TEMPLATE
Measurable Success Criteria

Business Success
1.

Project should increase


technological capability of
company.

Future
Opportunity
(Long Term)

Will assist in developing/


utilizing new technology

2.

Project completion should


ensure repeat business from
client.

Future
Opportunity
(Long Term)

Will create new


opportunities for future
Will create new market

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Lecture 4: Defining the Project-I


Evaluating Success
At the end of a project, success criteria can be used as
basis for evaluating project performance.
Looking at success from multiple perspectives would help
identify important indicators for future performance
improvements.

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Evaluating Success
Answering following questions will evaluate success of the project
Were success criteria met?
If the answer is yes, how was that accomplished, and how
can we ensure that our successes are repeated?
If the answer is no, why did we fail to meet our success
criteria?
Which criteria did we fail to meet?
Why did each failure occur?
Were the success criteria realistic and attainable?
What improvements can be made in the future to the way we
plan deliverables, execute projects or utilize project staff
resources?
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Lecture 4: Defining the Project-I


Conclusion
Success is the obvious goal of every project .... but it should
not be an unspoken goal, nor should it be taken for granted.
If you take the time to consider success from multiple
perspectives, you will make future project successes more
likely and easier to attain.

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