Project Planning. Project Planning. Project Planning MGMT 409 PROJECT MANAGEMENT PROJECT PLANNING: WORK BREAKDOWN STRUCTURE (WBS) (SLIDE SET 05)
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1 MGMT 409 PROJECT MANAGEMENT PROJECT PLANNING: WORK BREAKDOWN STRUCTURE (WBS) (SLIDE SET 05) Dr. Ömer Yağız Department of Business Administration EMU Project Planning Plans are only good intentions unless they immediately degenerate into hard work. Peter Drucker Who is Peter Drucker? The foremost authority on management who died last week at the age of Click for the CNN news about Drucker. This slide set has been prepared by Ömer Yağız for use in MGMT 409 Project Management. Material from the slide sets of Gray, Clifford F. and Erik W. Larson, Project Management, 3rd Ed. McGraw-Hill, and Meredith, J. R. and Samuel J. Mantel, Project Management, 5th Ed. were extensively used in the preparation of this slide set. 2 Project Planning Project success depends squarely on careful planning. No need for overanalysis.. Remember paralysis by analysis? Primary purpose of planning is to establish a set of directions in sufficient detail to tell the project team exactly what must be done when it must be done what resources to use in order to produce the deliverables of the Project Planning Objectives of a project include performance (outcome; deliverables) time cost This was discussed earlier. In order to develop the project plan, an important step is necessary; this is the step of defining the project. The next few slides will address this issue... project successfully
2 Defining the Project Defining the project involves the following steps: 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 Let us have a look at each of these important steps.. 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; in other words, it is the work that must be performed to deliver a product, service, or result with the specified features and functions. (PMI) 5 6 The Project Scope Statement Once the project scope is determined, the project scope statement must be prepared. The Project Scope Statement is a description of the project scope, including major deliverables, project objectives, project assumptions, project constraints, and a statement of work (SOW), that provides a documented basis for making future project decisions and for confirming or developing a common understanding of project scope among the stakeholders. In short, project scope statement explains what needs to be accomplished. 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. Scope describes what is to be delivered to the customer when the project is completed
3 In defining the project scope, the following Project Scope Checklist may be used: 1. Project objective overall objective of the project to meet customer s needs (what, when, how much) 2. Deliverables major deliverables expected outputs over the life of the project What is a deliverable? PMI defines it as any unique and verifiable product, result, or capability to perform a service that must be produced to complete a process, phase, or project Milestones A milestone is a significant event in a project that occurs at a point in time. The milestone schedule shows only major segments of work; it represents first rough-cut (i.e. crude, kaba) estimates of time, cost, and resources for the project. The milestone schedule is built using the deliverables as a platform or basis to identify major segments of work and an end date-for example, completion of the foundation for a building by December 15. Milestones should be easy to recognize for all project people and stakeholders Technical requirements Characteristics or specifications of the product or service in order for the output to perform satisfactorily or properly. Example: volts for a computer; easy computation of inventory carrying costs for an inventory planning and control software package. 5. Limits and exclusions The limits of scope should be defined; if this is not done, it may lead to false expectations (beklenti) and to expending resources and time on the wrong problem. Example: administrative re-organization project for EMU in Exclusions further define the boundary of the project by stating what is not included in the project. Example: training will be provided by the client; materials will be 6. Reviews with customer The main concern is the understanding and agreement of expectations with the customer-internal or external. Is the customer getting what he or she desires in deliverables? Does the project definition identify key accomplishments or milestones, budgets, timing, and performance requirements? Are questions of limits and exclusions clearly identified? Effective communication and coming to a full agreement on the above issues is vital for the succesful completion of the project. supplied by the client, etc
4 Concluding comments about project scope definition: A clear scope definition will enable us to know when there is a change in the project scope Project scope definition is a prerequisite (ön koşul) for developing a work breakdown structure Scope definition should be brief but complete An illustration follows on the next slide Gray and Larson, p Establishing Project Priorities Project management often involves trade-offs among performance, time (schedule), and cost 2. Establishing Project Priorities Causes of Project Trade-offs Shifts in the relative importance of criteria related to cost, time, and performance parameters Budget Cost Schedule Time Performance Scope Managing the Priorities of Project Trade-offs An important job of the PM is to manage the trade-offs among time, cost, and performance; therefore project managers must define and understand the nature of the priorities of the project
5 2. Establishing Project Priorities One technique which can be used is the priority matrix The priority matrix identifies which criterion is constrained, enhanced, or accepted Constrain: a parameter is a fixed requirement. The project must meet the scheduled completion date (time), specifications (or scope), or the budget (cost) Enhance: optimizing a parameter over others. Given the scope of the project, which criterion should be optimized? In the case of time and cost, this means either reduce costs or shorten the schedule of the project. With regard to performance, enhancing means adding alue to the project Establishing Project Priorities Accept: reducing (or not meeting) a parameter requirement. For which parameter (or criterion) is it permissible not to meet the original parameters? If trade-offs are necessary, is it okay for the schedule to slip, to reduce the scope and performance of the project, or to go over the budget? Illustration below... Reduce completion time to market product ASAP. In order to reduce time, it may be necessary to go over the budget, which means increased costs. The original performance specifications can not be compromised, i.e. cannot be sacrificed Establishing Project Priorities One should not forget that priorities may change during the course of a project. the project may have to completed before the due date because of some pressing need or situation cost savings may be necessary due to instructions from top management or the external client the PM must be ready to cope with such changes and find new ways of trade-off among the criteria of performance, time, and cost. Remember that project management is a highly dynamic undertaking!! 19 A work breakdown structure (WBS) is an exhaustive, hierarchical (from general to specific) tree structure of deliverables and tasks that need to be performed to complete a project. Defines the relationship of the final deliverable (the project) to its subdeliverables, and in turn, their relationships to work packages. It is a map of the project. Use of WBS helps assure project managers that all products and work elements are identified, to integrate the project with the organization, and to establish a basis for control 20 5
6 Level Program 1 Project 1 Project 2 2 Task 1.1 Task 1.2 HIERARCHICAL BREAKDOWN OF THE WBS 3 Subtask Subtask Work Package Work Package Illustration: Development Project of a Personal Computer A Gozinto Chart style WBS
7 An example of a work breakdown for painting a room (activity-oriented) : Prepare materials Buy paint Buy a ladder Buy brushes/rollers Buy wallpaper remover Prepare room Remove old wallpaper Remove detachable decorations Cover floor with old newspapers Cover electrical outlets/switches with tape Cover furniture with sheets Paint the room Clean up the room Dispose or store left over paint Clean brushes/rollers Dispose of old newspapers Remove covers Some comments about the WBS the WBS makes it possible to plan, schedule and budget the lowest level of the WBS is called the work package work packages are short duration tasks that have a definite start and end point, consume resources, and represent cost the work package is the basic unit for planning, scheduling, and controlling the project cont d next slide... WBS gives a framework for tracking cost and work performance; it provides the opportunity to roll up (i.e. sum) the budget and actual costs of the smaller work packages into larger work elements so that performance can be measured by organizational units and work accomplishment WBS defines communication channels and helps in understanding and coordinating many parts of the project
8 IMPORTANT.. 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 Integrating the WBS with the Organization An integral part of the WBS is to define the organizational units responsible for performing the work. This results in Organization Breakdown Structure. Organizational Breakdown Structure (OBS) Depicts (shows) 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. WORK BREAKDOWN STRUCTURE (WBS)
9 INTEGRATION OF WBS AND OBS WORK PACKAGES SORTED BY WBS Integrating Integrating the the WBS WBS with with the the Organization Organization WORK PACKAGES SORTED BY OBS The intersection of work packages and the organizational unit creates a project control point (cost account) that integrates work and responsibility (as shown on slide 33) The intersection of the WBS and OBS represents the set of work packages necessary to complete the subdeliverable located immediately above and the organizational unit on the left responsible for completing the packages at the intersection (as shown on slide 33)
10 5. Coding the WBS for the Information System WBS needs to be coded for maximum usefulness regarding planning, scheduling, monitoring, reporting and assigning costs. It is also necessary for using the computer for all of the above tasks and more. Referring to slide 33 will give you an idea about the nature of coding
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