Chapter 4

Project Scope Management

 Scope refers to all the works 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.
 Deliverables are products produced as part of a project,
such as hardware or software, planning documents, or
meeting minutes.
 Product Scope – requirements related e.g. functionality
 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 producing1

them.
Technical Knowledge
Management Knowledge Product (SW) development
phases
Project phases
Planning
Initiation
Analysis
Planning
Design
Executing
Construction/Coding
Closing
Testing
Deployment
Support & Maintenance
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Project Scope Management Processes
 Initiation: Beginning a project or continuing to the
next phase.
 Scope planning: Developing documents to
provide the basis for future project decisions.
 Scope definition: Subdividing the major project
deliverables into smaller, more manageable
components.
 Scope verification: Formalizing acceptance of the
project scope.
 Scope change control: Controlling changes to
project scope.
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Scope Planning and the Scope Statement
 Project scope planning involves developing documents to
provide the basis for future project decisions.
 It includes criteria for checking the successful completion of
a project or its phases.
 Its inputs include the project charter, description of
products, project constraints, and project assumptions.
 A scope statement is a document used to develop and
confirm a common understanding of the project scope. It
should include
 A project justification—describing the business need for
initiating the project.
 A brief description of the project’s products.
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 a summary of all project deliverables—list of the
products or deliverables of the project
 a statement of what determines project success—lists
the quantifiable criteria to accept the project as a
success including cost, schedule and quality measures
 In fact, scope statements vary from one project to the
other

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Scope Definition and the Work Breakdown Structure
 After completing scope planning, the next step is to
further define the work by breaking it into manageable
pieces.
 Scope definition is breaking works/activities 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.

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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.

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Sample Intranet WBS Organized by Product

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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.

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Principles to Create Good WBS
 A unit of work should appear at only one place in WBS.
 The work content of a WBS item is the sum of the WBS
items below it.
 A WBS item is the responsibility of one person.
 The WBS should be consistent with the actual work
performance.
 Involvement of project team members is necessary in
creating WBS.
 Document each WBS item for clear understanding of the
scope of work included.
 The WBS needs to be flexible tool to accommodate
inevitable changes while maintaining control.
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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 IT projects suffer from scope creep and poor scope
verification.
 Scope creep is the tendency to keep the project scope
bigger and bigger.
 Scope Verification involves formal acceptance of the
project scope by all stakeholders. Clear documentation is
required for scope verification.
 Scope change control is controlling changes to the project
scope. 11
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.

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Identifying Potential Projects
 Many organizations follow a planning process for
selecting IT projects.
 First develop an IT strategic plan based on the
organization’s overall strategic plan.
 Then perform a business area analysis.
 Then define potential projects.
 Then select IT projects and assign resources.

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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 for selecting IT projects include focusing on
 Broad needs,

 Categorizing projects,

 Financial methods, and

 Weighted scoring models

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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.

 There’s a strong will to make the project

succeed.

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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.

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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

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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.

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Net Present Value Example

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Return on Investment
 Return on investment (ROI) is income divided by
investment.
ROI = (Gain from investment – Cost of investment) /
Cost of investment
 The higher the ROI, the better.
 Many organizations have a required rate of return or
minimum acceptable rate of return on investment for
projects.

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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 analysis determines the time needed for
accrued benefits to overtake accrued and continuing
costs.
 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.
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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. 22
THANK YOU!!

QUESTION???
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