Project Scope Management PDF

Project Scope Management 23 What is Project Scope Management? Scope refers to all the work involved in creating the products of the project and the processes used to create them Project scope management includes the processes involved in defining and controlling what i...

Project Scope Management 23 What is Project Scope Management? Scope refers to all the work involved in creating the products of the project and the processes used to create them Project scope management includes the processes involved in defining and controlling what is or is not included in the project The project team and stakeholders must have the same understanding of what products will be produced as a result of a project and what processes will be used in producing them 24 Project Scope Management Processes 1) Initiation: authorizing the project or phase 2) Scope planning: developing documents to provide the basis for future project decisions 3) Scope definition: subdividing the major project deliverables into smaller, more manageable components 4) Scope verification: formalizing acceptance of the project scope 5) Scope change control: controlling changes to project scope 25 Project Initiation: Strategic Planning and Project Selection The first step in initiating projects is to look at the big picture or strategic plan of an organization Strategic planning involves determining long-term business objectives IT projects should support strategic and financial business objectives 26 Identifying Potential Projects Many organizations follow a planning process for selecting IT projects First develop an IT strategic plan based on Then perform a business area analysis Then define potential projects Then select IT projects and assign resources 27 Information Technology Planning Process 28 Methods for Selecting Projects There are usually more projects than available time and resources to implement them It is important to follow a logical process for selecting IT projects to work on Methods include focusing on broad needs, categorizing projects, financial methods, and weighted scoring models 29 Focusing on Broad Organizational Needs It is often difficult to provide strong justification for many IT projects, but everyone agrees they have a high value Three important criteria for projects: There is a need for the project There are funds available will to make the project succeed 30 Categorizing IT Projects One categorization is whether the project addresses a problem an opportunity, or a directive Another categorization is how long it will take to do and when it is needed Another is the overall priority of the project 31 Financial Analysis of Projects Financial considerations are often an important consideration in selecting projects Three primary methods for determining the projected financial value of projects: Net present value (NPV) analysis Return on investment (ROI) Payback analysis 32 Net Present Value Analysis Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time Projects with a positive NPV should be considered if financial value is a key criterion The higher the NPV, the better 33  NPV can be computed using the following formula Where: r= discount rate t= year n= analysis horizon (in years) * The annual percentage rate that an amount of money is discounted to bring it to a present value 34 Net present value example Note that totals are equal, but NPVs are not because of the time value of money. 35 Return on Investment Where r= rate y=year 36 Payback Analysis Another important financial consideration is payback analysis The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the net dollars invested in a project Payback occurs when the cumulative discounted benefits and costs are greater than zero Many organizations want IT projects to have a fairly short payback period 37 NPV, ROI, AND PAYBACK ANALYSIS FOR PROJECT 1 38 NPV, ROI, and Payback Analysis for Project 2 39 Weighted Scoring Model A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria First identify criteria important to the project selection process Then assign weights (percentages) to each criterion so they add up to 100% Then assign scores to each criterion for each project Multiply the scores by the weights and get the total weighted scores The higher the weighted score, the better 40  Since Project 2 has the highest weighted project score, it is the winner! Project 4 Project 3 Project 2 Project 1 0 10 20 30 40 50 60 70 80 90 41 Project Charters After deciding what project to work on, it is important to formalize projects A project charter is a document that formally recognizes the existence of a project and provides direction on the Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project 42 Scope Planning and the Scope Statement A scope statement is a document used to develop and confirm a common understanding of the project scope. It should include a project justification a summary of all project deliverables a statement of what determines project success 43 Scope Planning and the Work Breakdown Structure After completing scope planning, the next step is to further define the work by breaking it into manageable pieces Good scope definition helps improve the accuracy of time, cost, and resource estimates defines a baseline for performance measurement and project control aids in communicating clear work responsibilities 44 The Work Breakdown Structure A work breakdown structure (WBS) is an outcome-oriented analysis of the work involved in a project that defines the total scope of the project It is a foundation document in project management because it provides the basis for planning and managing project schedules, costs, and changes 45 Sample Intranet WBS Organized by Product 46  -2 WBS 1. Website design 1.1. Site map 1.2. graphic design 2. Home page design 2.1. Text 2.2. Images 2.3. Hyperlinks 3. Marketing pages 4. Sales pages 47 Sample Intranet WBS Organized by Phase 48 Approaches to Developing WBSs Using guidelines: Some organizations, like the DoD, provide guidelines for preparing WBSs The analogy approach: It often helps to review WBSs of similar projects The top-down approach: Start with the largest items of the project and keep breaking them down The bottom-up approach: Start with the detailed tasks and roll them up 49 Scope Verification and Scope Change Control It is very difficult to create a good scope statement and WBS for a project It is even more difficult to verify project scope and minimize scope changes Many Software projects suffer from scope creep and poor scope verification FoxMeyer Drug filed for bankruptcy after scope creep on a robotic warehouse refused to use it 50 I thank you. 51