Topic 2 2

Defining the
Project

4–1
Where We Are Now

4–2
 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

4–3
Step 1: Defining the Project Scope

4–4
 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.

4–5
 Project Scope Checklist

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

4–6
 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.
• Scope Creep
– The tendency for the project scope to expand over
time due to changing requirements, specifications,
and priorities.

4–7
Step 2: Establishing Project Priorities

4–8
 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 criterion over others.
– Accept: reducing (or not meeting) a criterion
requirement.

4–9
Project Management Trade-offs

FIGURE 4.1

4–10
Project Priority Matrix

FIGURE 4.2

4–11
Step 3: Creating the Work Breakdown
Structure

4–12
 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.

4–13
 Hierarchical
Breakdown of the
WBS

* This breakdown groups work

packages by type of work within a
deliverable and allows assignment
of responsibility to an organizational
unit. This extra step facilitates a
system for monitoring project
progress

FIGURE 4.3

4–14
 Work Break Down Structure
 A work break down structure is a technique/process in which
the complete project is broken down into small chunks/parts.

Project

Chunks/Parts

At this point we enter a stage of the process called decomposition to

further break the work down in to smaller and more manageable chunks
of work, called Work Packages.

How small and specific should Work Packages be?

Work Breakdown Structure

FIGURE 4.4

4–16
 Elements of each WBS Element:

• The scope of the project, "deliverables" of the

project.
1. Start and end time of the scope of project.
2. Budget for the scope of the project.
3. Name of the person related to the scope of project.

4–17
Level of WBS
 Level of work breakdown
structure
Work
project Sub-projects Tasks Sub-tasks
package
s
(LEVEL 1) (LEVEL 2) (LEVEL 3) (LEVEL 4) (LEVEL 5)

• There is no hard and fast rule and depends on your own

choice
• 1 or 2 levels can lead to difficulty in integration of activities
• Too many levels can make the analysis complex
• Then How many levels ??
TIPs

• WBS should be viewed as a roadmap.

• It should be descriptive, not vague.
• It should list out all the steps down to the smallest level.
» Ex: If 5 steps are there then all should be listed.
• Assuming that “everyone knows what steps are required to
complete the task” means failure.

4–20
 Level of work breakdown structure
1. Two approaches to the no of levels
2. Building up the WBS till such time that the work packages
available is capable of giving a good definition of work
content, the cost, time, and resources required.
3. Using 8/80 rule

A general rule is called the 8/80 rule.

No work package should be less than 8 hours of work, or more than
80 hours of work.

80

8
 Rules for determining the smallest chunk

1. Thumb Rule
2. If it makes sense Rule
3. 8/80 hour rule
4. Three week/year rule, etc.

4–22
 Work Packages
• A work package is the lowest level of the WBS.
– It is output-oriented in that it:
1. Defines work (what).
2. Identifies time to complete a work package (how long).
3. Identifies a time-phased budget to complete
a work package (cost).
4. Identifies resources needed to complete
a work package (how much).
5. Identifies a person responsible for units of work (who).
6. Identifies monitoring points (milestones)
for measuring success.

4–23
 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.

4–24
Step 4: Integrating the WBS with the
Organization

4–25
 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 organizational units to cost control
accounts.

4–26
 Organization Breakdown Structure (OBS)
• Development of WBS is developed demands the assignment
of appropriate resources and responsibilities.
• Develop the Organizational Breakdown Structure (OBS) for the
project. This indicates the organizational relationships and is
used as the framework for assigning work responsibilities. See
next slide.

• The OBS is structured by Responsible Department and then

by Performing Department at the lowest level. This
Performing Department level is where the responsibility and
resource needed to accomplish the project will be assigned.

• With the relationships and responsibilities defined, second and

final step is to merge the WBS and OBS.
Integration of
WBS and OBS

FIGURE 4.5
4–28
Organization Breakdown Structure (OBS)
PROJECT OFFICE
RESP
DEPT
B. Smithers

CIVIL STRUCTURAL ELECTICAL PLUMBING

RESP DEPT RESP DEPT RESP DEPT RESP DEPT
R. Kelly P. Tate J. Sims R. Lee

CONCRETE CARPENTRY WIRING WATER/SEWER

PERF DEPT 6010 PERF DEPT 5010 PERF DEPT 4010 PERF DEPT 3010
M. Manning R. Sites S. Johnson K. Wells

MASONRY ROOFING HOOKUP/TIE-IN GAS

PERF DEPT 6020 PERF DEPT 5020 PERF DEPT 4020 PERF DEPT 3020
T. Greams Y. Taylor P. Ottis R. Oriely

TEST DRYWALL
PERF DEPT 6030 PERF DEPT 5030
K. Neumann D. Smith

29
Step 5: Coding the WBS for the Information
System

4–30
 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

4–31
Coding
the WBS

EXHIBIT 4.5
4–32
 WBS-Construction of House

WBS-Construction of House (Example)

Decide individual tasks necessary

to complete the house 33
The individual tasks necessary to complete the house.

Level 1: is the highest level where the

Level 1  project (house) will be summarized.
NOTE: We assume that the design is
complete, all permits issued, all material
ordered and inspection happens
• Level 2 is identified at the project level: House. It correspond
to Level 1. In this case, the code is 1.1.

Level 1 

Level 2 

34
• Divide the work into the major elements needed to build a house. You
divide Level 3 into six elements: concrete, framing, plumbing,
electrical, interior and roofing. These are both major deliverables and
milestones for managing the project. They also enable the project by task.
• Each codes at level 3 is unique to the project and starts with the WBS code
from the level above (11.11.1.1).
• Do we need another level?

Level 1 

Level 2 

Level 3 

35
 Level 4 of the WBS will enable us to manage the project as desired. All
of our contractors fit into specific elements at level 4, and so do all
specific departments. Organization Breakdown Structure (OBS)
• The WBS is complete. It does include the necessary components to
manage the project by task.

Level 1 

Level 2 

Level 3 

Level 4 

36
 Housing Corporation
1.1 New Home Construction
1.1.1 Concrete
1.1.1.1 Pour Foundation
1.1.1.2 Install Patio
1.1.1.3 Pour Stairway
1.1.2 Framing
1.1.2.1 Frame Exterior Walls
1.1.2.2 Frame Interior Walls
Tree 1.1.2.3 Install Roofing Trusses
1.1.3 Plumbing
Format 1.1.3.1 Install Water Lines
1.1.3.2 Install Gas Lines
1.1.3.3 Install B/K Fixtures
1.1.4 Electrical
1.1.4.1 Install Wiring
1.1.4.2 Install Outlets/Switches
1.1.4.3 Install Fixtures
1.1.5 Interior
1.1.5.1 Install Drywall
1.1.5.2 Install Carpets
1.1.5.3 Install Painting
1.1.6 Roofing
1.1.6.1 Install Felt
1.1.6.2 Install Shingles
1.1.6.3 Install Vents
37
38
Responsibility Matrices

4–41
 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.

4–42
Responsibility Matrix for a Market Research Project

FIGURE 4.7

4–43
Responsibility Matrix for the Conveyor Belt Project

FIGURE 4.8

4–44
Project Communication Plan

4–45
Stakeholder Communications

FIGURE 4.9

4–46
 Project Communication Plan

• What information needs to be collected

and when?
• Who will receive the information?
• What methods will be used to gather
and store information?
• What are the limits, if any, on who has
access to certain kinds of information?
• When will the information be communicated?
• How will it be communicated?

4–47
 Information Needs

• Project status reports

• Deliverable issues
• Changes in scope
• Team status meetings
• Gating decisions
• Accepted request changes
• Action items
• Milestone reports

4–48
 Developing a Communication Plan

1. Stakeholder analysis
2. Information needs
3. Sources of information
4. Dissemination modes
5. Responsibility and timing

4–49
Oil Research Project Communication Plan

FIGURE 4.10
4–50
 Assignment
• Develop a WBS for the bungalow project
• Use Microsoft project for WBS

4–51
 construction of a house
Series Assigned to Rate ($) Hours
internal
electrical
1 rough in electrical A 5,000 34

2 install and terminate B 5,000 16

3 HVAC equipment C 15,000 12

plumbing
1 rough in plumbing D 22,000 12

2 set plumbing fixtures E 31,000 8

3 test and clean F 8,000 23

foundation
excavate
1 pour concrete G 30,000 34
2 cure and strip forms H 7,000 14
steel erection
1 steel coloums I 5,000 16
2 beams J 2,000 22
3 joist K 2,000 21
external
Masonry work
1 install roof drains L 2,000 8
2 roofing M 10,000 9
3 install tiles N 15,000 10
Building finishes
1 paint wall O 8,000 13
2 ceiling tiles P 4,000 12
3
carpet Q 1,500 8
4 hardware R 6,000 27
 1

1.1 1.2 1.3

1.1.1 1.2. 1.2.2 1.3. 1.3.2

1.1.2 1 1
1.1.1.1 1.1.1.2 1.1.2.1 1.2.1.2 1.2.2.1 1.2.2.2 1.3.1.1 1.3.1.2 1.3.2.1
4–54
4–55