• a project plan is a formal, approved

document that guides project execution and

control. It explains in detail how and when to
fulfill the project objectives by showing the
major products, milestones, activities, and
resources required on the project.
 Elements of Project Master Plan
• Overview
– brief description of project
– deliverables
– milestones
– expected profitability and competitive impact
– intended for senior management
• Objectives
– detailed description of project’s deliverables
– project mission statement
 Elements of Project Master Plan
continued
• General approach
– technical and managerial approaches
– relationship to other projects
– deviations from standard practices
• Contractual aspects
– agreements with clients and third parties
– reporting requirements
– technical specifications
– project review dates
 Elements of Project Master Plan
continued
• Schedules
– outline of all schedules and milestones
– Work breakdown structure
• Resource requirements
– estimated project expenses
– overhead and fixed charges
• Personnel
– special skill requirements
– necessary training
– legal requirements
 Elements of Project Master Plan
concluded
• Evaluation methods
– evaluation procedures and standards
– procedures for monitoring, collecting, and storing
data on project performance
• Potential problems
– list of likely potential problems
– Late subcontractor deliveries, bad weather,
unreasonable deadlines, equipment failure etc.
THE PLANNING PROCESS

MEM 612 Project

 PM’s First Job
• Understand the expectations that the
organization has for the project.
• Identify who among senior managers has a
major interest in the project.
• Determine if anything about the project is
atypical.
 Developing Invitation List
• At least one representative from senior
management.
• Managers from functional areas that will
contribute to the project.
• Perhaps highly specialized technical experts.
 The Launch Meeting
• Senior management introduces PM
• PM chairs meeting
– develop general understanding of the functional inputs the
project will need
– may brainstorm the problem
– may develop preliminary plan
• Important results
– scope understood and temporarily fixed
– functional managers understand their responsibilities and
have committed to developing the initial plan
 Project Planning Process
1. Clearly define project objective (scope)
2. Develop a Work Breakdown Structure (WBS)
3. Estimate time needed for each task
4. Determine resources needed for each task
5. Estimate cost needed for each task
6. Develop project schedule and budget (adjust as
needed)

10
 Project Scope
A clear project scope definition provides the guidelines that
are used to develop your project plan.
Project Scope Checklist:
• Project objectives (purpose, due date, budget)
• Deliverables (at each major phase of project)
• Milestones (significant events in the project)
• Technical requirements
• Limits and exclusions (who, what, how)
• Review with customer (agreement on expectations)

11
 Identifying Necessary Activities
• Start by identifying major-level activities or tasks
• Then each major task can be broken down into
subtasks
• Project team members can be responsible for
breaking down different major activities
• Then each subtask is broken down to lower-level
tasks, and so on until you have basic work-unit levels
(work packages) that will be assigned
• Result: Work Breakdown Structure (WBS)

12
 Mind Maps
• Mind maps are a tool to help identify all the
necessary activities in a project
• It’s a type of brainstorming tool
• The mind mapping process can bring out more ideas
than simply making a list
• It engages the team and generates enthusiasm
• It brings out quieter team members
• Mind mapping can be fast, compared to an outlining
or listing approach

13
Mind Map for Project Planning

Registration Transportation

Promotion
10K run to
Route
raise $50K
for homeless
shelter
Prizes/recognition
Clean-up

Refreshments Facilities
Safety

14
 Mind Map for WBS
Investigate Produce
past events ads

TV and Purchase
Interview Research radio ads air time
running
club
members Promotion Monitor
airings

Flyers
Print Design
Mailings
Mail
promo
Distribute
Prepare Acquire
mailing address
To schools To sports lists
retailers

Part 4 - Project Planning 15

 Work Breakdown Structure
• Either shown graphically in a tree structure, or as
index numbers listed beside activities
• Entire project is Level 0; the major-level activities are
Level 1; and so on
• Index numbers identify level of the task in the tree
structure
• WBS # 4.2.5 indicates that the task is at Level 3 (3
decimal places) and is the 5th sub-subtask under the
2nd subtask under the 4th major activity

16
 WBS Tree Structure
Level
Carnival
0 Beth

1 2 3 4 5 6
Volunteers Promotion Games Rides Entertain. Food
1 Joan Beth Tom Kyle Jill Bob

2.1 2.2 2.3 5.1 5.2

Posters Newspaper Tickets Grandstand Performers
2 Bob Beth Mark Mark Jill

5.1.1 5.1.2 5.1.3

Stage Sound Seating
3 Alan Ben Mark

17
A Partial WBS for an Annual Tribute Dinner
Project
 Ex: WBS - Buy A House
` BUY A HOUSE

FIND
LOCATION FINANCING
HOUSE

- Determine - Type of
1 - Criteria 3 6
affordability House

- Determine - Find Real

- Visit
2 4 mortgage 7 Estate
Locations
provider Agent

- Lockup
- Look for
5 mortgage 8
House
commitment

- Make
9 Offer, P&S
Agreem't

10 - Closing

Top Down Decomposition, Elemental Tasks

WBS Activity List
WBS Activity
Carnival
1 Volunteers
2 Promotion
2.1 Posters
2.2 Newspaper
2.3 Tickets
3 Games
4 Rides
5 Entertainment
5.1 Grandstand
5.1.1 Stage
5.1.2 Sound
5.1.3 Seating
5.2 Performers
6 Food

20
 WBS for Promotion Example
Level 1 Task Level 2 Tasks Level 3 Tasks
1. Promotion 1.1 Research 1.1.1 Investigate past events
1.1.2 Interview running club members
1.2 TV and radio ads 1.2.1 Produce ads
1.2.2 Purchase air time
1.2.3 Monitor airings
1.3 Mailings 1.3.1 Acquire mailing lists
1.3.2 Prepare mailings
1.3.3 Mail promotional materials
1.4 Flyers 1.4.1 Design flyers
1.4.2 Print
1.4.3 Distribute to schools
1.4.4 Distribute to sports retailers

21
 Creating the Work
Breakdown Structure
• Work Breakdown Structure (WBS)
– An hierarchical outline (map) that identifies the
products and work elements involved in a project
– Defines the relationship of the final deliverable (the
project) to its subdeliverables, and in turn, their
relationships to work packages
– Best suited for design and build projects that have
tangible outcomes rather than process-oriented
projects
 How WBS Helps the Project Manager
• WBS
– Facilitates evaluation of cost, time, and technical
performance of the organization on a project
– Provides management with information appropriate to
each organizational level
– Helps in the development of the organization
breakdown structure (OBS), which assigns project
responsibilities to organizational units and individuals
– Helps manage plan, schedule, and budget
– Defines communication channels and assists in
coordinating the various project elements
Work Breakdown Structure

FIGURE 4.4
 Work Packages
• 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)
 Integrating the WBS
with the Organization
• Organizational Breakdown Structure (OBS)
– Depicts 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
WBS & OBS – 6th ed, p.114
Integration of WBS and OBS

FIGURE 4.5
How far does the breakdown goes?
• As far as needed to completely define all work
necessary for the project
• Should answer to all or most of the following
Inputs Task Outcomes

Predecessors Statement of work Deliverables

Preconditions Time Results
Resources Cost
Requirements/Specifications Responsibility
Quality assurance
Risk
 Responsibility Chart
• Often called Linear Responsibility Chart or
Responsibility Matrix
• Shows who has primary responsibility for each task
• Can also show who provides support, who must be
notified upon completion, who must give final
approval, who is the backup person, etc.
• It lets everyone see their roles throughout the
project
• Also help clarify the extent or type of authority
exercised by each participant

30
 Responsibility Chart
WBS Activity Beth Joan Bob Mark Tom Kyle Jill Alan Ben
Carnival P S S S S S
1 Volunteers P S
2 Promotion P S S
2.1 Posters P S
2.2 Newspaper P S
2.3 Tickets S P
3 Games P S
4 Rides S P
5 Entertainment S S P
5.1 Grandstand P S
5.1.1 Stage P S
5.1.2 Sound S P
5.1.3 Seating P S S
5.2 Performers S P
6 Food S P
P = Primary responsibility; S = Support responsibility

31
Sample Responsibility Matrix

6-32
 Project Communication Plan – Core
Questions to Answer
• What information needs to be collected?
• Who will receive information?
• What information methods will be used?
• What are the access restrictions?
• When will information be communicated?
• How will information be communicated?
 1.Stakeholder analysis
• Power/Interest Map
• Professionals doing
the work
• Senior management
And project sponsor
• Unions and operations manager
• Legal, public relations and other departments
 2.Information needs
• What information is pertinent
• What and when
Project status reports
Change in scope
Gating decisions
Action items
Deliverable issues
Team status meeting
Milestones reports
 3.Source of information
• Minutes and reports of various groups
 4. Dissemination modes
• Email
• Teleconferencing
• Web (automatic routing and immediate
access)
 Responsibility and timing
• Timing and frequency needs to be established
• Determine who will send the information
 Advantages
• Proactive rather than reactive
• Reduces confusion and interruptions
• Provide manager with greater autonomy
Communication Plan:

FIGURE 4.9
• Unnecessary large number of works packages
should be avoided as the work packages
become the focal point of planning and
control
• More the packages, more the time and cost to
manage them
 Estimating Guidelines for Times,
Costs, and Resources
1. Have people familiar with the tasks make the estimate.
2. Use several people to make estimates.
3. Base estimates on normal conditions, efficient methods, and
a normal level of resources.
4. Use consistent time units in estimating task times.
5. Treat each task as independent, don’t aggregate.
6. Don’t make allowances for contingencies.
7. Adding a risk assessment helps avoid surprises to
stakeholders.
Copyright © 2006 The McGraw-Hill
McGraw-Hill/Irwin 5–43
Companies. All rights reserved.
 Estimating Activity Durations
Two Approaches
1. Bottom-up estimate: Ask the person responsible for
each low-level task how long they think it will take.
This assumes a given amount of resources.
2. Top-down estimate: Based on the project due date,
tell the person responsible for each low-level task
how much time they are allotted to do the task.
They must then determine how much resources are
needed to meet the deadline.

Part 4 - Project Planning 44

 Estimating Activity Durations
For a given amount of resources, how can you estimate
a task duration?
• use the expert’s best guess (person doing task)
• use past data, if task has been done before
• use engineering standards or work standards
• dissect task into different elements and estimate
time needed for each element
The task time estimate should reflect the most likely
time needed to do the task.

45
 Top-Down vs. Bottom-Up Budgets
• Top-Down Budgeting: Senior management decides
how much they think the project should cost, and
that becomes the total project budget. The budget is
then divided among the activities.
– Advantages and disadvantages?
• Bottom-Up Budgeting: Cost estimates for each task
are solicited from those responsible for the tasks.
These estimates are rolled up for all activities to get
the total project budget.
– Advantages and disadvantages?

46
Advantages and disadvantages of top down and bottom up budgeting
Top down Bottom up
• Intended use • Intended use
- feasibility/rough time-cost - Budgeting/scheduling/reso
estimate/fund requirement urce requirements
• Preparation cost • Preparation cost
-0.1 to 0.3 percent of total cost -0.3 to 1 percent of total cost
• Accuracy • Accuracy
- -20 to +60 % - -10 to +30%
 Estimating Projects: Preferred
Approach
• Make rough top-down estimates.
• Develop the WBS/OBS.
• Make bottom-up estimates.
• Develop schedules and budgets.
• Reconcile differences between top-down and
bottom-up estimates

Copyright © 2006 The McGraw-Hill

McGraw-Hill/Irwin 5–49
Companies. All rights reserved.
 Refining Estimates
• Reasons for Adjusting Estimates
– Interaction costs are hidden in estimates.
– Normal conditions do not apply.
– Things go wrong on projects.
– Changes in project scope and plans.
• Adjusting Estimates
– Time and cost estimates of specific activities are
adjusted as the risks, resources, and situation
particulars become more clearly defined.

Copyright © 2006 The McGraw-Hill

McGraw-Hill/Irwin 5–50
Companies. All rights reserved.
 Refining Estimates (cont’d)
• Contingency Funds and Time Buffers
– Are created independently to offset uncertainty.
– Reduce the likelihood of cost and completion time
overruns for a project.
– Can be added to the overall project or to specific
activities or work packages.
– Can be determined from previous similar projects.
• Changing Baseline Schedule and Budget
– Unforeseen events may dictate a reformulation of the
budget and schedule.

Copyright © 2006 The McGraw-Hill

McGraw-Hill/Irwin 5–51
Companies. All rights reserved.
 Baseline Plan
• The finalized budget, time estimates, and resulting
project schedule are the basis for the baseline plan.
• The baseline plan lays out the target levels of
progress and performance at the outset of the
project execution phase.
• It is the basis for assessing project performance
throughout the project
• Project tracking utilizes the baseline plan to provide
the project manager with a control tool

52
 Project Action Plan
For each activity, action plan should at least show
• Activity name
• Time duration estimate
• Start date
• Immediate predecessor activity
• Resources needed

Optionally, it might also show finish date, WBS index,

cost, slack time, latest finish date, etc.
53
 Action Plan in Microsoft Project
ID Task Name Duration Start Finish Predec. Resourc
1 Proj. approval 0 days 3/1/04 3/1/04
2 Script writing 14 days 3/1/04 3/19/04 1 SW
3 Sched. shoots 17 days 3/1/04 3/24/04 1 C,P,S
4 Script approval 8 days 3/19/04 3/31/04 2 C,P
5 Revise script 5 days 3/31/04 4/7/04 4 P,SW
6 Shooting 10 days 4/7/04 4/21/04 3,5 P,S,SW
7 Editing 7 days 4/21/04 4/30/04 6 E,ER
8 Final approval 2 days 4/30/04 5/4/04 7 C,P,E
9 Deliver to client 0 days 5/4/04 5/4/04 8
C=client, E=editor, ER=editing room, P=producer, S=secretary, SW=scriptwriter

54