Project

Project Planning
Planning
MGMT 409 PROJECT MANAGEMENT
Plans are only good intentions unless they
immediately degenerate into hard work.
Peter Drucker

PROJECT PLANNING:
WORK BREAKDOWN STRUCTURE
(WBS)

Who is Peter Drucker? The foremost authority

on management who died last week at the age
of 95... Click for the CNN news about Drucker.

(SLIDE SET 05)

Dr. mer Yaz

Department of Business Administration
EMU

This slide set has been prepared by mer Yaz 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, 2006. and Meredith, J. R. and Samuel J. Mantel, Project Management, 5th Ed. were extensively used
in the preparation of this slide set.

Project
Project Planning
Planning

Project
Project Planning
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 successfully.

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...

Defining
Defining the
the Project
Project

1.
1. Defining
Defining the
the Project
Project Scope
Scope

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

Project scope
A definition of the end result or mission of the
projecta product or service for the
client/customerin 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)

Let us have a look at each of these important

steps..

1.
1. Defining
Defining the
the Project
Project Scope
Scope

1.
1. Defining
Defining the
the Project
Project Scope
Scope

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.
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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.

1.
1. Defining
Defining the
the Project
Project Scope
Scope

1.
1. Defining
Defining the
the Project
Project Scope
Scope
3. Milestones

In defining the project scope, the following

Project Scope Checklist may be used:
1. Project objective
overall objective of the project to meet customers needs
(what, when, how much)

2. Deliverables

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.

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.
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1.
1. Defining
Defining the
the Project
Project Scope
Scope
4. Technical requirements

Characteristics or specifications of the product or service in

order for the output to perform satisfactorily or properly.
Example: 120-240 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 2004.
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
supplied by the client, etc.
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1.
1. Defining
Defining the
the Project
Project Scope
Scope
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.

12

1.
1. Defining
Defining the
the Project
Project Scope
Scope

1.
1. Defining
Defining the
the Project
Project Scope
Scope

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 (n koul) for
developing a work breakdown structure
Scope definition should be brief but complete
An illustration follows on the next slide...

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2.
2. Establishing
Establishing Project
Project Priorities
Priorities

Gray and Larson, p. 102

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2.
2. Establishing
Establishing Project
Project Priorities
Priorities

Project management often involves trade-offs

among performance, time (schedule), and cost

Causes of Project Trade-offs

Shifts in the relative importance of criteria related to
cost, time, and performance parameters
BudgetCost
ScheduleTime
PerformanceScope

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

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16

2.
2. Establishing
Establishing Project
Project Priorities
Priorities

2.
2. Establishing
Establishing Project
Project Priorities
Priorities

One technique which can be used is the priority

matrix
The priority matrix identifies which criterion is
constrained, enhanced, or accepted

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...

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.
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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.
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2.
2. Establishing
Establishing Project
Project Priorities
Priorities

3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure

One should not forget that priorities may change

during the course of a project.

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
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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!!
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3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure
Level

3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure

Program
Project 1

Project 2
HIERARCHICAL BREAKDOWN

Task 1.1

Task 1.2

Subtask 1.1.1

Work Package 1.1.1.1

OF THE WBS

Subtask 1.1.2
Work Package 1.1.1.2
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3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure

22

3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure
Illustration: Development Project of a Personal Computer

A Gozinto
Chart style
WBS

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24

3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure
An example of a work breakdown for painting a
room (activity-oriented) :
Prepare materials

Buy
Buy
Buy
Buy

paint
a ladder
brushes/rollers
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

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3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure
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
contd next slide...

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3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure
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

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3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure

3.
3. Creating
Creating the
the Work
Work Breakdown
Breakdown Structure
Structure

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.
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44.. Integrating
Integrating the
the WBS
WBS with
with the
the Organization
Organization

30

WORK BREAKDOWN STRUCTURE (WBS)

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.
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32

INTEGRATION OF WBS AND OBS

WORK PACKAGES SORTED BY WBS

33

34

44.. 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)
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5.
5. Coding
Coding the
the WBS
WBS for
for the
the Information
Information
System
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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