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INSTRUCTOR’S RESOURCE MANUAL

CHAPTER FIVE Scope Management

To Accompany PROJECT MANAGEMENT: Achieving Competitive Advantage By Jeffrey K. Pinto

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

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CHAPTER FIVE PROJECT PROFILE — Airbus A380: Plane of the Future or Enormous White Elephant? Introduction 5.1 CONCEPTUAL DEVELOPMENT The Statement of Work 5.2 THE SCOPE STATEMENT The Work Breakdown Structure Purpose of the Work Breakdown Structure The Organization Breakdown Structure The Responsibility Assignment Matrix 5.3 WORK AUTHORIZATION 5.4 SCOPE REPORTING Project Management Research in Brief: IT Project Failure – Burying Our Heads in the Sand 5.5 CONTROL SYSTEMS Configuration Management 5.6 PROJECT CLOSEOUT Summary Key Terms Discussion Questions Problems Case Study 5.1: Calcutta’s Metro Case Study 5.2: Project Management at Dotcom.com Cas Study 5.3: Runaway Scope – The Bradley Fighting Vehicle Internet Exercises MSProject Exercises Integrated Project – Developing the Work Breakdown Structure Bibliography

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TRANSPARENCIES

5.1 ELEMENTS IN PROJECT SCOPE MANAGEMENT 1. Conceptual Development - Problem statement - Information gathering - Constraints - Alternative analysis - Project objectives - Statement of Work (SOW) 2. Scope Statement - Goal criteria - Management plan - Work Breakdown Structure (WBS) - Scope baseline - Responsibility Assignment Matrix (RAM) 3. Work Authorization - Contractual requirements - Valid consideration - Contracted terms

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5.1 ELEMENTS IN PROJECT SCOPE MANAGEMENT (Con’d) 4. Scope Reporting - Cost, Schedule, Technical performance status - S curves - Earned value - Variance or exception reports 5. Control Systems - Configuration control - Design control - Trend monitoring - Document control - Acquisition control - Specification control 6. Project Closeout - Historical records - Post-project analysis - Financial closeout

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5.2 PURPOSES OF THE WORK BREAKDOWN STRUCTURE

1. IT ECHOES PROJECT OBJECTIVES.

2. IT IS THE ORGANIZATION CHART FOR THE PROJECT.

3. IT CREATES THE LOGIC FOR TRACKING COSTS, SCHEDULE, AND PERFORMANCE SPECIFICATIONS FOR EACH ELEMENT IN THE PROJECT.

4. IT MAY BE USED TO COMMUNICATE PROJECT STATUS.

5. IT MAY BE USED TO IMPROVE OVERALL PROJECT COMMUNICATION.

6. IT DEMONSTRATES HOW THE PROJECT WILL BE CONTROLLED.

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5.3 PARTIAL WORK BREAKDOWN STRUCTURE

1.0

1.2

1.3

1.4

1.2.1

1.3.1

1.4.1

1.2.2

1.3.2

1.4.2

1.2.3

1.5

1.4.3

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5.4 THE INTERSECTION OF THE WBS AND OBS

1.0

IT Installation 1.3

Prepare proposal

1.4

Seek & hire IT consultant

1.4.1

Search committee

Project

1.5

Seek support for IT

1.4.2

Develop criteria

Deliverables

1.4.3

Select consultant

Work Packages

Departments

Information Systems

Cost Account

Cost Account

Human Resources

Cost Account

Cost Account

Procurement

Cost Account

Cost Account

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5.5 COST ACCOUNT ROLLUP USING OBS 1.0

IT Installation 1.3

Prepare proposal

1.4

Seek & hire IT consultant

1.4.1

Search committee

Project

1.5

Seek support for IT

1.4.2

Develop criteria

Deliverables

1.4.3

Select consultant

Work Packages

Departments

Information Systems

$500

Human Resources

$500

Procurement

$500

Totals

-0-

$1,500

$1,000

$1,000

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5.6 RESPONSIBILITY ASSIGNMENT MATRIX

LEAD PROJECT PERSONNEL Deliverable Match IT to Org. Tasks – 1.1

Task & Code

Bob IS

David IS

Susan HR

Beth Procurement

James Engineering

Terry Legal

Problem Analysis - 1.1.1 Develop info on IT technology - 1.1.2

Identify IS user needs – 1.2

Interview potential users - 1.2.1 Develop presentation - 1.2.2 Gain user “buy in” - 1.2.3

Prepare proposal - 1.3

Develop cost/ benefit info - 1.3.1

Responsible

Support

Notification

Approval

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DISCUSSION QUESTIONS 1. What are the primary benefits of developing a comprehensive project scope analysis? A comprehensive project scope analysis serves several benefits that permit a company to guide the dream of a project to a successful completion. One benefit is transforming the idea of the project into a working concept. Once the concept is developed, project details can be mapped out. Scope analysis outlines each step of the project in a detailed manner. The primary benefit to this is it aligns the project so that the final product will be consisted with the original goals/objectives. By outlining each step, scope analysis increases the likelihood that the project will stay within budget and time constraints as well as meet predetermined specifications and quality parameters.

2. Refer to the Bradley Fighting Vehicle case at the end of the chapter (Case Study 5.3). When is “Scope creep” useful and when is it dangerous? Under what circumstances might an organization refuse to freeze design specifications for valid reasons (e.g. Microsoft)? Scope creep occurs when the project specifications are continually readjusted. This is undesirable when the objective of the project is highly standardized product – one that is needed to serve a very exact purpose. However, in the case of a product such as computer software, scope creep may be beneficial. Companies like Microsoft stay competitive through innovation. By allowing project team members to have more freedom in design and creation, they are fostering an environment conducive to innovation. As software engineers see areas for improvement or innovation they are allowed to act on it. Thereby creating a more creative and competitive product.

3. What are the key characteristics of a work package?

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A work package is a specific step of the project. Work packages are smaller pieces of the whole project, which are more manageable and definable than the whole. They create a chronological map from one step to the next detailing what needs to be completed at each stage. Each work package includes its own deadline, resource requirements and supervisor. Work packages can be further broken down into subtasks that can be assigned to an individual worker or group. Collectively, all the work packages of a project combined lead the project team from the start to completion of the project.

4. Create a Work Breakdown Structure for a term paper project or another school-related project you are working on. What are the steps in the WBS? Can you identify any substeps for each step? This assignment is designed to get students comfortable with deconstructing the project into various levels, including Deliverables, and Work Packages. The goal is identifying the relevant elements in the project, not the sequential nature of those steps. If instructors wish, they can ask students, as a second step, to create some idea of the sequentiality of these WBS elements.

5. What are the benefits of designing a Responsibility Assignment Matrix (RAM) for a project? An RAM outlines the team members directly responsible for each task. It also includes a list of supporting organizational members. It is beneficial for following chain of command, solving interdepartmental issues and receiving proper approval. Additionally, an RAM increases the flow of communication throughout the team. By knowing who is in charge of what, members can notify the necessary people of progress or completion of tasks. This keeps the group informed of potential problems and up-to-date on the project’s current status.

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The process of creating the RAM is also beneficial to the project manager. It requires the identification of team members’ abilities, qualifications, strengths and weaknesses. Tasks and assignments can then be better coordinated to create the highest level of efficiency.

6. Develop an argument for scope reporting mechanisms. At a minimum, what types of reports do you consider necessary for document control of a project? Why? Two main concerns of project scope are seeing that the project meets time and budget constraints. Without some sort of limits (i.e. project scope), projects can quickly become expensive, long-term investments of a company’s time and resources. Scope reporting can help reduce the risk of such runaway projects. Reports that update on costs incurred using S-curves and variance updates are important for keeping the project within budget constraints. These reports may also serve as control mechanisms. If team members know they will have to publish spending reports frequently to other members in the organization, they may be less likely to approve unscheduled expenditures. Reports related to adherence to the planned time schedule work in a similar fashion. If the project begins to lag behind, team members may have more incentive to look for the cause of the delays if they are required to report variances from the planned time table.

7. What is the chief purpose of configuration management? In your opinion, why has it become increasingly popular in recent years as part of the project management process? The main purpose of configuration management is to manage and control change within projects. A plan for execution of activities and tasks is agreed upon by those involved in the project. Configuration management then monitors variations from this preestablished plan. Change is an anticipated factor of project management. Configuration management provides a way to deal with changes as they arise, so they do not cause more disruption than necessary. Changes are documented so that all involved in the project may be notified and modifications can be made universally. By identifying necessary

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changes as early as possible and handling the problem early on, configuration management decreases time delays related to unforeseen conditions and helps reduce obstacles that may result from change later on in the project process.

8. What is the logic behind developing a plan for project close-out prior to even beginning the project? Upon completion of the project, certain documentation will be required by management and/or the client involved. The documentation may be used for legal purposes, as training material or in auditing procedures. Therefore, it is important that the closeout information be thorough and accurate. Creating a plan early on is important because proper documentation may need to be performed as the project progresses. By knowing what information will be required at the end of the project, the team can keep proper records at various stages as the project advances. Trying to create this documentation after the fact may be difficult or inaccurate.

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CASE STUDIES Case Study 5.1: Calcutta’s Metro Calcutta’s Metro project is a true story of a project disaster, when measured against schedule and budget. The case lists a number of problems with a project that was relatively modest in scope (10 miles of track and 17 stations) but ended up costing over $5 billion dollars and taking 23 years to complete. The case is enjoyable for students because, using 20/20 hindsight, several of the problems they encountered seem to be obvious. It is useful to send students to the internet to research Boston’s “Big Dig” harbor tunnel project and develop some comparisons and contrasts between that project (which is also well over budget and behind schedule) and the Calcutta metro case. For example, the Big Dig’s final cost is expected to be $14.6 billion and one of the two tunnels has become leaking! Students can be directed to an interesting website for the Boston project at http://www.tollroadsnews.com/cgi-bin/a.cgi/6S2C! DOMEdmcEIJ61nsxIA. It presents a useful starting point to their own analysis of the Calcutta project. Questions: 1) Assume that you are the mayor of Calcutta soliciting bids for the construction of the Metro. How would you construct a Statement of Work for the project to encourage efficient and creative means for undertaking this project? Students can be asked to use the sample Statement of Work (SOW) from the chapter to begin developing their own set of details and specifications for the project’s scope. How would they redesign the scope to minimize the disruptions that digging a metro through a densely populated city are bound to create? Among the interesting elements of this problem are the identification of significant risks of all types. How do they account for them? Also, what about resource requirements? It is useful to get students thinking in

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terms of a society with huge amounts of manpower but limited machinery means to engage in a project of this scope? How are these various factors each accounted for? 2) How much of the problems the Metro project faced were the result of a poorly conceived project scope and how much was due to simple bad luck? Defend your position. This question allows people to debate the two perspectives. Certainly, there is always some bad luck associated with large projects, like the Calcutta Metro. The question becomes whether or not such “bad luck” should be factored into the initial scope statement and expectations for project development. For example, while it is not the fault of the project organization that they kept hitting gas and water pipes due to poorly charted infrastructure, the lack of these maps should have been taken into consideration when they originally developed the timeframe for completion. Without detailed drawings, they were bound to hit these mains. Further, common sense might suggest that when the organization provided comprehensive housing, wages, and benefits (including school for workers’ children) for employees, they were bound to work at a pace that allowed them to maximize those benefits (in this case, 23 years).

Case Study 5.2: Project Management at Dotcom.com This case is based on a true story and illustrates some of the key challenges that IT organizations face when they attempt to develop solutions for clients. Many of these clients understand their problems but don’t see how to create an appropriate solution. Others, however, think they understand their needs but find the solutions generated for them to be inadequate or simply addressing the wrong issues. It is a classic story of cope definition that many IT organizations routinely deal with when trying to satisfy the needs of clients.

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Questions: 1. How would you begin redesigning Dotcom.com’s project management processes to minimize the problems they are experiencing with poor scope management? One suggestion might be the inclusion on the project team of a representative of the client. It appears that one key problem lies in the fact that project teams talk to the customer and then go away to develop the solution in a vacuum. Then, at the back end of the development cycle, the customer is presented with a project solution that many times does not satisfy them. This lack of communication is a key factor in the problems the company is experiencing with their projects. 2. How do the company’s consulting clients contribute to the problems with “scope creep?” If you were to hold a meeting with a potential customer, what message would you want them to clearly understand? Customers often do not recognize the link between project changes and cost. They may assume that the project contract gives them unlimited rights to suggest or demand any changes after the project was developed, or that the IT solution presented to them is only a working model and subject to modifications. Without good communication between the project organization and their clients, these misunderstandings will escalate as the consulting firm demands more money for the changes and the clients argue that they will not pay for modifications because the project firm did not do it right the first time. “Why should we pay for your mistakes,?” is a comment commonly expressed by customers. The key message that the customers must understand is the need to maintain strong lines of communication and develop some milestones that allow for “reality checks” throughout the development cycle. There should be no surprises at the time of delivery. 3. How do you balance the need to involve clients with the equally important need to freeze project scope in order to complete the project in a timely fashion?

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This may be the key conundrum in managing IT projects and is a great point of departure for in-class discussion. Students are usually quick to point the finger of blame; either at the IT firm for not getting clear information or at the customer for not providing it. Instructors can set up a “point/counter-point” discussion on the causes of IT project failure and how many are linked precisely to this problem and the failure to resolve it as early in the project contract as possible. 4. Why are configuration management and project change control so difficult to perform in the midst of a complex software development project such as those undertaken by Dotcom.com? One of the keys to configuration management is communication between customer and client as both parties observe early versions of the system and identify the needed modifications. The problem for IT organizations is that they are loath to grant too much power to modify the system in mid-development for fear that the initially contracted terms will become meaningless through multiple changes orders. They desire spec freeze precisely for the reason that customers hate it. Hence, configuration management is difficult because it is hard for customers, who are not sophisticated with IT technologies, to identify relevant points when configuration management should occur. Their lack of understanding of the development process often makes it hard to create good a priori change controls processes. Instead, they usually simply react (negatively) to perceived inadequacies of the solution, after installation.

Case Study 5.3: Runaway Scope: The Bradley Fighting Vehicle This case is a famous true story of a project for which the original scope (the development of a replacement armored infantry vehicle) changed so often and dramatically that the Army ended up with a hybrid vehicle that could not perform any of its missions well (e.g., too little room to transport troops, too lightly armored and slow to serve as a scout vehicle).

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1) The Bradley suffered from the problem of “scope creep,” the continual reassessment and change of a project’s original specifications. How did scope creep directly affect the Bradley’s final design?

Scope creep is the process of allowing a project’s scope to remain unfixed; that is, to refuse to lock in the specifications prior to the start of project execution. As a result, the final product can undergo numerous changes and reconfigurations throughout its development and end up as a product that satisfies nobody. In the case of the Bradley, the desire to create an armored scout and an infantry transport vehicle resulted in a design that did not perform either task well.

2) When is scope creep useful and when is it dangerous? Under what circumstances might an organization refuse to freeze project design specifications for valid reasons?

Scope creep can be useful in cases where the project is still undergoing modifications of its initial specifications; that is, when the scope has not yet been loced in. It can also be useful when it reflects market realities. For example, a company may be developing a product only to have a competitor get their version to market first. Under this situation, remodification of the project could result in a superior design or help correct deficiencies that could only be detected once the project was under development. Scope creep is dangerous if it is not coupled with discipline in the project management process. At some

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point, it does become necessary to stop the design phase and get started with the execution of the project.

The reasons an organization may refuse to freeze specs are usually related to technical issues that require continuous testing and approvals or when market conditions mandate a change in the project’s characteristics to reflect realities. One famous example was Texas Instruments desire to penetrate the PC market backing the 1980’s with a vastly inferior product. They should have recognized that the technology had passed them by while they were developing their PC and reconfigured it.

3) Suppose you were brought in as a consultant for the Bradley development during the 1960s. What would been some of the warning signs of development problems you could have observed?

One warning sign was the inability to select a primary mission for the vehicle. What was the key role it was expected to play? As long as the Army flirted with multiple and competing roles, they were not likely to develop a product that could adequately fulfill any of them. Another warning sign was the poor testing that seemed designed to pass the Bradley without any controversy. Clearly, this was a weapon system the Army wanted regardless of what independent analysis would recognize.

4) Develop a strategy for managing the various stakeholders on the Bradley project. In terms of its scope, are there middle ground compromises you can identify?

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This question asks students to first identify the various stakeholders for the project (FMC Corporation, the Army, the Army testing branch, Government oversight personnel, etc.). They are then asked to identify how these stakeholder demands will conflict with each other and what strategies they might undertake to address them, without violating the needs of other stakeholders. This example works best if stakeholders are first identified, they desires named, some prioritization of these desired is developed, and then students are expected to develop strategies that will allow them to address one set of stakeholder needs without violating the critical needs of other groups. Do they perceive the nature of tradeoffs? This is a critical point to get across; namely, there may be no “ideal” strategy but there are still methods for “satisficing” the needs of the various stakeholder groups.

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MSProject EXERCISES Using the information provided below, construct a simple WBS table for the project example. Project Outline – Remodeling an Appliance I

Research Phase

II

Design and Engineering Phase

III

Testing Phase

IV

Manufacturing Phase

V

Sales Phase

I

Research Phase A. Prepare product development proposal 1) Conduct competitive analysis 2) Review field sales reports 3) Conduct technological capabilities assessment B. Develop focus group data C. Conduct telephone surveys D. Identify relevant specification improvements

II

Design and Engineering Phase A. Interface with Marketing staff B. and so on

III

Testing Phase

IV

Manufacturing Phase

V

Sales Phase

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Solution: Entering Tasks Using Custom WBS Codes 1. To view WBS codes, display the sheet view 2. Enter each activity on the MS Project task sheet 3. On the Project menu, point to WBS, and then click Define Code (See Figure 5.13) Figure 5.13 – WBS Screen Shot

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

4. As you begin to enter each task and identify it as either a first-level, second-level, or third-level heading, the WBS will demonstrate the organization of the project (See Figure 5.14). Your final output should resemble the following:

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Figure 5.14 – WBS Codes

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

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