CHAPTER FIVE

PROJECT PLANNING FUNDAMENTALS

5.1 INTRODUCTION
 Three issues arise in the planning and control
process:
(1) During the conception and definition phases
a plan is made specifying the project requirements,
work tasks, responsibilities, schedules, and budgets;
(2) during the execution phase the plan is compared
to actual project performance, time, and cost; if there
are discrepancies,
(3) corrective actions are taken and the requirements,
schedules, and budgets updated.
INTRODUCTION … CONT’D
 Planning
and control are essential parts of project
management;
 they enable people to understand what is needed to meet
project goals and
 reduce the uncertainty of outcomes.

 Thischapter gives an overview of the planning

process and the initial steps in preparing project
plans.
INTRODUCTION … CONT’D
Project Charter
 A project charter is a document that briefly describes the
statement of work, expected end-items or results, and
required resources.
 If the work is being performed under contract, the
contract will serve as the charter.
 The purpose of the charter is to enable the project
manager, senior management, and functional managers
to reach agreement about the scope of the project and the
resources they will commit to it.
5.2 STEPS IN PROJECT PLANNING
 Once key members of the project team have been
assembled, they begin preparing the detailed project
plan. The plan includes:-
1. Project objectives, requirements, and scope are
set. These outcome elements specify project end
items, desired results, and time, cost, and
performance targets.
 The scope includes specific acceptance requirements
that the customer uses to determine acceptability of
results or end items.
STEPS IN PLANNING … CONT’D
2. The specific work activities, tasks, or jobs to
achieve objectives are broken down, defined, and
listed. (What?)
3. A project organization is created specifying the
departments, subcontractors, and managers
responsible for work activities. (Who?)
4. A schedule is prepared showing the timing of
work activities, deadlines, and milestones. (When, in
what order?)
STEPS IN PLANNING … CONT’D
5. A budget and resource plan is prepared showing
the amount and timing of resources and
expenditures for work activities and related items.
(How much and when?)
6. A forecast is prepared of time, cost, and
performance projections for the completion of the
project. (How much time is needed, what will it cost,
and when will the project be finished?)
STEPS IN PLANNING … CONT’D
 These steps need to be followed each time
because every project is somewhat unique,
requires different resources, and must be
completed to specific time, cost, and
performance standards to satisfy users’
requirements.
5.3 THE PROJECTMASTER PLAN
 Theproject is initiated with the preparation of a
formal, written master plan. The purpose of this
plan is:
 to guide the project manager and team throughout the
project life cycle;
 to tell them what resources are needed, when, and
how much they will cost; and,
 to permit them to measure progress and
performance.
THE PROJECT MASTER…CONT’D
Summary Plan Vs. Master Plan
 The difference between the summary plan in the
proposal and the master plan is that the former is
intended for the customer, and the latter for the project
team.
 The summary plan need only contain enough detail to
give the customer an overview; the master plan must be
of sufficient detail to guide the team in the execution of
the project.
o Once top management approves the plan it gives the

project manager tacit authority to conduct the project in

accordance with the plan.
THE PROJECT MASTER…CONT’D
Contents of Master Plans
 The contents of master plans vary depending on the size,
complexity, and nature of the project.
 Usually, the plan has three major sections:

I. Management Summary. Brief explanation of the

project in favor of top-level management. It includes:
a brief description of the project,
 Its objectives,
 overall requirements, constraints, problem areas (and how
they will be overcome), and
 the master schedule showing major events and milestones.
THE PROJECT MASTER … CONT’D
II. Management and Organization Section. Which
specifies the organization and personnel requirements for
the project. It includes:
A) Project Management and Organization: Describes how
the project will be managed and identifies key personnel
and authority relationships.
B) Manpower: forecasts of workforce requirements in
terms of skills, expertise, and strategies for locating and
recruiting qualified people.
C) Training and Development: Summary of the executive
development and personnel training necessary to support
the project.
THE PROJECT MASTER… CONT’D
III. Technical Section:
ׄDescribes major activities, timing, and cost. It includes:
A) Statement of work and scope of work: General description of major
project activities and tasks, and results or end-items.
B) Work breakdown: List of work packages and description of each.
C) Responsibility assignments: List of personnel and responsibility for work
packages.
D) Project schedules: showing major events, milestones, and points of
critical action or decision. May include Gantt charts, project networks, and
PERT/CPM diagrams.
THE PROJECT MASTER… CONT’D
E) Budget and financial support: Estimates and timing of capital
and development expenses for labor, materials, and facilities.
F) Testing: Listing of things to be tested, including procedures,
timing, and persons responsible.
G) Change control plan: Procedures for changes request to any
aspect of the project plan.
H) Quality plan: Measures for monitoring quality and accepting
results for individual work tasks, components, and end-item
assemblies.
I) Work review plan (may be included in quality plan):
Procedures for periodic review of work, noting what is to be
reviewed, by whom, when, and according to what standards.
THE PROJECT MASTER… CONT’D
J) Documentation: List of documents to be produced and how
they will be organized and maintained.
K) Implementation: Discussion and guidelines showing how the
customer will convert to, or adopt, the end-item of the project.
L) Economic justification: Summary of alternatives in meeting
project objectives showing tradeoffs between costs and
schedules.
M) Areas of uncertainty and risk: Contingency plans for areas
of greatest uncertainty in terms of potential work failure or
missed milestones.
THE PROJECT MASTER … CONT’D
Tools of Project Planning
ᴥMuch of the technical content of project plans is derived
from the basic tools described in this chapter. They include:
(1) Work breakdown structure and work packages—used to
define the project work and break it down into specific tasks.
(2) Responsibility matrix—used to define project organization,
key individuals, and their responsibilities.
(3) Events and milestones—used to identify critical points
and major occurrences on the project schedule.
(4) Gantt Charts—used to display the project master schedule
and detailed task schedules.
5.4 SCOPE AND WORK DEFINITION
Scope Definition
Ọ Scope definition is the process of specifying the criteria for
determining if important phases of work and the project have
been completed.
Ọ Scope definition results in a document called the scope
statement, which specifies:-
 the user acceptance requirements,
 project objectives, or
 high-level specifications for the main end-item and
supplementary side items.
Ọ The document focuses on the main areas of work to be
performed and the anticipated deliverables or end-items.
SCOPE &WORK … CONT’D
 The scope statement serves as a reference source for
everyone in the project to review and agree upon the
needs, requirements, objectives, and end-items, as well
as about what individual contributions are expected.
 It also provides the basis for making decisions about
the resources needed to complete the project and about
required changes to work tasks or end-items that
would alter the project scope.
SCOPE &WORK … CONT’D
Work Breakdown Structure
♥ Large & complex projects consist of several smaller,
interrelated tasks and work elements.
♣ The procedure for decomposing the overall project into sub-
elements is called the work breakdown structure or WBS.
☺The purpose of a WBS is to divide the total project into
small pieces, sometimes called work packages.
♠ Decomposing the project into work packages enables us to
prepare project schedules and cost estimates and to assign
management and task responsibility.
SCOPE &WORK … CONT’D
◙ A typical WBS might consist of the following five
levels (actually the number of levels varies; the name of
the element description at each level is arbitrary):
Level Element Description
1 Project
2 Category
3 Subcategory
4 Sub-subcategory
5 Work package
SCOPE &WORK … CONT’D
☻The WBS is reviewed again and again to make sure
everything is there.
☻Supplementary or missed items are identified and
added to the structure at appropriate levels.
☻The WBS should be checked by the various project
participants to ensure that nothing was missed.
SCOPE &WORK … CONT’D
◙ How far down does the breakdown structure go?
♠ As far as is necessary to completely define a work
task. Sometimes a Level 2 breakdown will be adequate,
though usually a Level 3 or higher level breakdown will
be necessary.
♠ For a task to be well defined it must have the
following properties:
SCOPE &WORK … CONT’D
(i) Clear, comprehensive statement of work: The task
is well-enough defined so the responsible ones know exactly
what must be done.
(ii) Resource requirements: The labor, skills, equipment,
facilities, and materials for the task are identified.
(iii) Time: The time needed to perform the task is estimated.
(iv) Cost: The costs for the required resources,
management, and related expenses for the task are estimated.
(v) Responsibility: The parties, individuals, or job titles
responsible for performing the task and approving it are
identified.
SCOPE &WORK … CONT’D
(vi) Outcomes: The deliverables, end-items and associated
requirements and specifications for the task are identified.
(vii) Inputs: The preconditions or predecessors needed to
begin the task are identified.
(viii) Quality Assurance: The entry, process, and exit
conditions to which the task must conform are identified; these
are specified in the quality plan.
NB. If any of the properties mentioned above cannot
be defined, then the task is too broad and must be
broken down further.
SCOPE &WORK … CONT’D
WBS in the Planning and Control Process
♣The WBS is the crucial element of the project
planning and control process. It is used in three ways:
(1) During the WBS analysis, functional managers,
subcontractors, and others who will take part in the
work are identified and become involved.
♥ Their approval of the WBS helps ensure accuracy and
completeness of work definition, and gains their
commitment to the project.
SCOPE &WORK … CONT’D
(2) The WBS and WPs become the basis for budgeting
and scheduling.
♣ The cost and time estimates for each WP show what
is expected to complete that work package.
♣ The sum of work package budgets plus overhead and
indirect expenses becomes the target cost of the entire
project.
♣ These budgets and schedules are the baselines against
which actual figures will later be compared to measure
project performance.
SCOPE & WORK … CONT’D
(3) The WBS and WPs become the basis for project
control.
♠ While the project is in progress, actual work
completed for each work package is compared to work
that was scheduled to have been completed. The result
is an estimate of time and schedule variance.
♠ Similarly, a comparison of actual expenditures to
date with the value of the work accomplished gives an
estimate of cost variance.
♠ Schedule and cost variances for the project as a whole
are determined by summarizing all schedule and cost
data throughout the WBS.
SCOPE &WORK … CONT’D
Work Packages
◙ Within the WBS, WPs signify jobs of about equal
magnitude of effort and be of relatively small cost and
short duration compared to the total project.
◙ Sometimes, to reduce the number of WPs in large
projects, several related activities or small work
packages are aggregated to form work packages on
the basis of cost and time. For example, some
Companies guidelines specify that work packages
should be of 3 months’ duration and not exceed
$100,000 in cost.
12/25/2021 Temesgen B. (PhD), School of Commerce
29
Fig. Deliverable oriented WBS