Project Management – PTM721S Faculty of Computing and Informatics 7 August2017 Project Management – PTM721S Lesson 5 – Project scope management

Project scope management Faculty of Computing and Informatics Project scope management Why organisations invest in IT projects Definition of project scope management Project scope management processes Project initiation – techniques for selecting projects Scope planning and scope statement Scope definition and WBS Scope verification and scope change control

Why organisations invest in IT projects? Faculty of Computing and Informatics Why organisations invest in IT projects? Support explicit business objectives Has good Internal Rate of Return (IRR) Supports implicit business objectives Has good Net Present Value (NPV) Has reasonable payback period Used in response to competitive systems Supports management decision making

Why organisations invest in IT projects? Faculty of Computing and Informatics Why organisations invest in IT projects? Meets budgetary constraints High probability of achieving benefits Good accounting rate of return High probability of completing projects Meets technical/system requirements Supports legal/government requirements Good profitability index Introduces new technology

Definition of project scope management Faculty of Computing and Informatics Definition of project scope management Scope refers to all work involved in creating the products of a project and all processes used to create them A deliverable is a product produced as part of the project Deliverables can be project-related such as pieces of hardware or software or process-related such as a planning document or minutes of meeting

5 Project scope management processes Faculty of Computing and Informatics 5 Project scope management processes Initiation – committing organisation to begin a project or continue to next phase – PROJECT CHARTER Scope planning – developing documents to provide basis for future project decision – CRITERIA FOR COMPLETION Scope definition – subdividing major project deliverables – WORK BREAKDOWN STRUCTURE Scope verification – formalizing acceptance of project scope Scope change control – controlling changes to project scope – SCOPE CHANGES, CORRECTIVE ACTION, LESSONS LEARNT

Initiation – Identifying potential projects – SWOT Analysis Faculty of Computing and Informatics Initiation – Identifying potential projects – SWOT Analysis

Initiation – 5 techniques for selecting projects Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects Focusing on broad organisational needs Categorising information technology projects Performing Net Present Value (NPV) analysis, present value or other financial analyses Using a weighted scoring model Implementing a balanced scorecard

Does the project meet need? Does the project meet funding? Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects - Focusing on broad organisational needs Organisational needs, e.g., improve safety, increase moral, provide better communications, improve customer service Three criteria: Does the project meet need? Does the project meet funding? Does the project meet will?

Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – categorizing IT projects Problems – undesirable situations that prevent an organisation from achieving its goals, e.g. getting information in a timely manner Opportunities – chances to improve organisation, e.g. enhance sales by selling products directly to customer Directives – requirements imposed by management, government or external vendors Time it will take to complete project, e.g., customer requires vendor to use EDI to do business with them Overall priority of project

Initiation – 5 techniques for selecting projects – Net Present Value Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Net Present Value Net Present Value (NPV) is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows Estimated costs and benefits of project and products Determine discount rate – minimum acceptable rate of return on investment - what organisation would expect to receive elsewhere for investment of similar nature

Initiation – 5 techniques for selecting projects – Net Present Value Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Net Present Value

The higher the ROI, the better Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Return on Investment (ROI) (see next slide for example) Return on investment (ROI) are results of subtracting project costs from benefits and then dividing by costs ROI = (total discounted benefits – total discounted costs) / discounted costs ROI = (516, 000 – 243,200) / 243, 200 = 112% The higher the ROI, the better

Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Return on Investment

Initiation – 5 techniques for selecting projects – Payback analysis Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Payback analysis 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

Initiation – 5 techniques for selecting projects – Payback Analysis Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Payback Analysis

Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Weighted scoring model A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria Identify criteria important to the project selection process Assign weights (percentages) to each criterion so they add up to 100% 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

Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Weighted scoring model

Initiation – 5 techniques for selecting projects – Balanced scorecard Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Balanced scorecard A balanced scorecard is a methodology that converts and organisation’s value drivers such as customer service, innovation, operational efficiency and financial performance to a series of defined metrics www.balancedscorecard.org

Faculty of Computing and Informatics Initiation – 5 techniques for selecting projects – Balanced scorecard example

Faculty of Computing and Informatics Project Charter A project charter is a document that formally recognizes the existence of a project and provides direction on the project’s objectives and management Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project; a signed charter is a key output of project integration management

Parts of the Project Charter Faculty of Computing and Informatics Parts of the Project Charter Project title and date of authorization Project manager’s name and contract information A brief description of project objectives A summary of planned approach for managing project A roles and responsibilities matrix A sign-off section for signatures of key project stakeholders A comments section in which stakeholders can provide important comments related to project

Scope planning and scope statement Faculty of Computing and Informatics Scope planning and scope statement Project scope planning is developing documents to provide the basis for future decisions including the criteria for determining if a project or project phase has been completed successfully The output of project scope planning: Witten scope statement Project scope management plan

Scope planning and scope statement – scope statement Faculty of Computing and Informatics Scope planning and scope statement – scope statement Scope statement is a document used to develop and confirm a common understanding of the project scope Project justification – business need for project Brief description of project’s products – characteristics of products or services the project will produce Summary of project deliverables – e.g. problem plan, WBS, cost estimate, communications management plan, performance reports Quantifiable criteria for project success, e.g. cost, schedule, quality measures References to supporting documents, e.g. org. charts,

Scope planning and scope statement – project scope management plan Faculty of Computing and Informatics Scope planning and scope statement – project scope management plan A project management plan is a document used to coordinate all project planning documents and help guide a project’s execution and control The components of a project management plan Introduction or overview of the project Description of how the project is organized Management and technical processes used on the project Work to be done, schedule, and budget information

Scope planning and scope statement – sample project management plan Faculty of Computing and Informatics Scope planning and scope statement – sample project management plan

Scope definition and work breakdown structure (WBS) Faculty of Computing and Informatics Scope definition and work breakdown structure (WBS) WBS is a deliverable-oriented grouping of work involved in a project that defines the total scope of the project. For example: Evaluate current systems Define requirements Define specific functionality Define risk and risk management approach Develop project plan Brief project team Design and develop prototype Roll out Support

Scope verification and scope change control Faculty of Computing and Informatics Scope verification and scope change control Scope verification involves formal acceptance of project scope by the stakeholders Factors causing IT project problems: Lack of user input Incomplete requirements and specifications Lack of executive support Technology incompetence Lack of resources Unrealistic expectations Unclear objectives Unrealistic time frames New technology

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