What is Project Management?

A project is an endeavor that is undertaken to produce the results that are expected from the requesting party. A project consists of three components namely, scope, cost and schedule.   When a project is first assigned to a project manager it is important that all three of these components be clearly defined.  Scope represents the work to be accomplished, i.e., the quantity and quality of work.  Cost refers to costs, measured in dollars and /or labor-hours of work.  Schedule refers to the logical sequencing and timing of the work to be performed.  The quality of a project must meet the owner’s satisfaction and is an integral part of project management, which is shown as an equilateral triangle to represent an important principle of project management: a balance is necessary between the scope, budget, and schedule.

Project Management Triangle

In any project, there is a certain amount of work that must be performed and an associated cost and schedule for producing the work.  Any increase/decrease in scope of work requires a corresponding increase/decrease in cost and schedule.  Not only should the scope, cost and schedule be well defined, but each must be linked together since one affects the other, both individually and collectively. Since the project scope defines the work to be accomplished, it should be the first task in the development of a project, prior to the development of either the cost or the schedule.

Work Breakdown Structure

For a large or small size project, it is necessary to develop a well-defined work breakdown structure (WBS) that divides the project into identifiable parts that can be managed.  The concept of WBS is simple: in order to manage a whole project one must manage and control each of its parts.  The WBS is the cornerstone of the project work plan.  It defines the work to be performed, identifies the needed expertise, assist in selection of the project team and establishes a base for project scheduling and control.  A WBS is a graphical display of the project that shows the division of work in a multi-level system.

Work Breakdown Structure

The project is broken down so the components at each level are subsets of the next higher level. The number of levels in a WBS will vary according to the size and complexity of the project.  The smallest unit in the WBS is a work package.  A work package must be defined in sufficient detail so the work can be measured, budgeted, scheduled and controlled.  The development of the WBS is a continuing process that starts when the project is first assigned to the project manager and continues until all work packages have been defined.  The project manager starts the process of developing the WBS by identifying major areas of the project.  As members of the project team define the work to be performed in more detail, the WBS is adjusted accordingly.  Thus, the WBS is used from start to the finish of the project for planning and controlling.  It is an effective means of defining the whole project, by parts, and providing effective communication channels for exchange of information that is necessary for management of the project.

The WBS is the foundation of a project management system.  Code numbers can be used to relate the WBS to the Organizational Breakdown Structure (OBS) for management of people.  Code numbers can also be used to relate the WBS to Cost Break down Structure (CBS) for management of costs. Similarly, code numbers can relate the WBS to the Critical Path Method (CPM) schedule to manage time.  Thus, the WBS provides a systematic approach for identifying work, compiling the budget, and developing an integrated schedule.  Since WBS is developed jointly by the project team, the people that will actually perform the wok, it is an effective tool for relating work activities to ensure that all work is included and that work is not duplicated.  Most importantly, it provides a basis for measurement of performance. It is followed by forming the project team and kick-off meeting.  Three important purposes of the meeting are – to orient team members regarding project objectives and needs, to distribute the project manager’s overall project plan, and to assign each team member the responsibility of preparing work packages for work required in his or her area of expertise.  Work packages should be prepared and returned to the project manager within two weeks of the kick-off meeting.

Work Packages

The project manager is responsible for organizing a work plan for the project:  However, he or she cannot finalize the project plan without extensive input from each team member.  The kick-off meeting should serve as an effective orientation for team members to learn the project requirements and restrictions of budget and schedule.  At that meeting, the project manager assigns each team member to review the scope of work required of his/her respective expertise, to identify any problems, and to develop a budget and schedule required to meet the scope.  This can be accomplished by preparing a design work package that describes the work to be provided.  Each team member is responsible for the development of one or more work packages for the work he or she is to perform.

A work package provides a detailed description of the work required to meet project needs and to match the project manager’s initial work plan.  The work packages should be assembled by each team member and supplied to the project manager within two weeks of the kick-off meeting. A work package is divided into three categories: scope, budget and schedule.  The scope describes the required work and services to be provided.  It should be described in sufficient detail so other team members, who are providing related work, can interface their work accordingly.  This is important because a common problem in project management is coordinating related work.  There is a risk of the same work being done by two persons, or work not being done at all, because two people are each thinking the other person is providing the work.  Team members must communicate among themselves during the process of preparing the work packages for a project.  A work package is the lowest level in the WBS and establishes the baseline for project scheduling, tracking and cost control.  The work package is extremely important for project management because it relates the work to be performed to time, cost, and people.

In the budget section, a code account number relates the work to the CBS.  Likewise, the schedule section has a code number that relates the work to the OBS. The CBS is used for management of project costs.  The OBS code number identifies and links the work to the people.  The preparation of the budget portion of a work package requires a careful evaluation of all resources needed to produce the work.  All work tasks and items must be budgeted, including personnel, computer services, reproduction expenses, travel, expendable supplies, and incidental cost.

After the WBS is complete, the next step is to link the OBS from the company to the required work that is defined in the WBS.  The project manager, with the assistance of discipline managers, can then begin the process of selecting individuals from the various discipline departments who will form the project team.  The linking of the WBS and OBS establishes the project framework fro management of the project. After the project framework is defined, a project schedule can be developed to guide the timing of activities and interface related work.  The time and cost required to accomplish each activity can be obtained from the work packages.

The CPM technique is the most common network scheduling system that is used in the engineering and construction industry.  After completion of the project framework, a coding system often referred to as a Cost Breakdown System, can be developed to identify each component of the WBS.  The coding system provides a common code of accounts used by all participants in the project because it is directly related to the WBS, that, the work to be performed.

The integration of the WBS, OBS and CPM forms the project plan, which is the base for project tracking and control.  A code of accounts can be developed that relates the required work (defined in the WBS) to the people who will do the work in accordance with the schedule to complete the project.  Thus, the WBS, OBS and CPM must be linked together to form an all encompassing project plan.  To be effective, a system of project management must integrate all aspects of the project; the work to be done, which is going to do it, when it is to be done, and what the cost will be.  Actual work can then be compared to planned work, in order to evaluate the progress of a project and to develop trends to forecast at completion costs and schedules.

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