Planning and Managing Projects

Project Initiation

Karl Holub

Hi class. My name is Karl Holub and in this segment, we will be looking at topics that as a project
manager, we need to understand and consider as we plan for and kick off our projects.

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 Project Management Framework

CONCEPT
DISPOSAL DEFINITION
Executing, Monitoring,
Initiating & Planning
Controlling & Closing
Iteration Directing &
Work
Authorization
PMO Finance,
Contracts &

SUPPORT
Procurement
DESIGN
Staffing and Stakeholder
Scope & Stakeholder Monitoring Delivery &
Startup Value
Objectives Organization & Control Closeout
Value Plan Delivery

Schedule
Create a Resource Manage to
baseline plan Planning &
Budgeting Baseline Evaluation baseline plan

Manage: Risk, Configuration, Change, Quality, Conflict, Multi-Projects

OPERATIONS DEVELOPMENT
PRODUCTION

© Staś Tarchalski

So here we are with a project management framework, and what we're looking at is the entire box
which is in the blue dotted line. So we'll be talking about why we actually plan, and the value that it
provides in making a project efficient in its execution.

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 Learning Objectives

 Introduce the concept of the “Triple Constraint.”

 Discuss the importance of the Project Contract.
 Understand the concept of a project charter.
 Understand the definition and need for the Statement of Work (SOW) or Statement of Objectives
(SOO).
 Explain the differences between a SOW and a SOO.

So the focus of this module is to set the stage for the project, its planning and execution at the
beginning of the life cycle. The learning objectives for this module is to develop an understanding
regarding those initial documents that will define the project. We will begin by discussing the Triple
Constraint for project management: cost, schedule and performance. Given that our company has
won the project and it has a contract in hand, we will need to become familiar with that contract to
understand the programmatic parameters we will be operating under, with respect to cost, schedule
and performance: Regulations, specifications, processes, deliverables and so on for all those items
that will make up our project and create the bounds within which we will need to operate. We will also
discuss a project charter. What it is and its value to the project. We will then move on to discuss the
Statement of Work, also known as an SOW and its corollary, the statement of objectives and how
they are the same and how they differ.

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 Triple Constraint
Scope

Schedule
Budget

I wanted to spend a few minutes talking about a very basic fundamental concept for project
management, the Triple Constraint. In project management, we talk about how we are constantly
working to balance the three parts of the Triple Constraint. Cost or the monetary aspect, schedule or
the time aspect and scope or the purpose or reason for the project. It is in that balance, as reflected
in our planning, execution and resolving of issues that arise throughout the project life cycle that we
strive to achieve the right balance or mix to successfully deliver the outcome of the project within the
required time frame, within the funding available. Yes. There are other things that will also influence
these three items. Government regulations and specifications a project must adhere to, the business
environment you may be operating in and so on. But underlying all of that for the project manager, it
is the balancing of those three items that will be critical for successful project outcome within the
other constraints. You will hear much more about various aspects of the triple constraint throughout
the semester and as you pursue your career as a project manager.

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 The Project Contract

Before beginning the development of any of the project planning it is

important that the project manager understand the contract.
• Who is the customer?
• What type of contract is it—fixed price, incentive fee, R&D, etc.?
• What is the purpose of the project? What are the contract deliverables?
• What resources is the customer providing (funding, customer furnished equipment, etc.)
• What is the required schedule? What are key milestones?
• Are there detailed specifications, standards to which the project must adhere?
• Are there positive incentives for delivering early or under cost?
• Are there penalties for late delivery or cost overruns?
• How does the project manager know when the project is done for close out?

These are just some examples of items the Project Manager will need to
know to effectively plan and manage the project.

So given that our company has won the project and has a contract with a customer in hand, we will
need to become familiar with that contract even if we are involved during the proposal effort as the
actual final contract may have changed during final negotiations with the customer. That contract is
what our company has officially agreed to do for the benefit of the customer who is paying us, the
company. The contract sets the official and legal parameters that we as project managers need to
consider for our project. It will, if we did not know previously, state who the customer is and the scope
performance expected by the completion of the project. It will tell us the resources we have to work
with, the level of funding that the customer is providing to achieve the desired outcome. There may
be financial positive incentives if we exceed the required performance or deliver for a lower cost or
shorter schedule or conversely, negative penalties if we exceed cost or schedule. It will tell us the
time frame for the project that will ultimately translate and to the schedule we will create to achieve
the desired outcome. Interim deliverables will be stated in the contract. Interim status reports, design
reviews, possibly financial reports, etc. There will be listed, stated, required specifications and
standards that we will need to adhere to. These may include design standards and quality standards.
There may be special requirements. An example may be special regulatory reviews. Environmental
requirements are licenses to be obtained. The contract will also tell us what the criteria are that need
to be met for us to be able to claim that we have met the contract and finally be able to officially close
out the project. The acceptance criteria for each deliverable, such as test criteria, inspection criteria,
who has the authority to inspect and accept the deliverables for the customer, will also be stated. The
bottom line for the project manager is, be familiar with your contract to ensure that your planning and
execution will ultimately result in meeting the customer's desired outcome in cost, schedule and
specification boundaries.

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 Project Charter

Documents the
Usually an internal project manager’s Documents scope
Usually includes:
company document authority and of the project
responsibility

Project background
IDs the Project Project description, Key stakeholders-
(business purpose,
Manager (PjM) and objectives, and roles and Risks
conditions defining
his/her authority constraints involvement
the project)

So what is a project charter? The project charter is usually developed as an internal company
document. While it may or may not be developed for every project, depending on your company's
processes, it can provide you valuable guidance. The charter will document things like the project
manager's authority and associated responsibility and a scope or high level view of the project which
will be further defined in a statement of work or statement of objectives, which we will talk about
shortly. It will usually provide the project manager and the project team with some of the business
background and context for the project, objectives and constraints and key stakeholders. Internal and
external, with any major risks that have been identified during the proposal and/or planning stages for
the project. Again, you may or may not see this for every project, but if it is available or if you have
the opportunity to develop a charter, remember that much of the information will ultimately be needed
as you plan your project.

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 What is a Statement of Work (SOW)?

“A Narrative Description of the Work Required” - Harold Kerzner

“Specifies… the work to be done in developing or producing the goods or

services to be performed by a contractor” – MIL-HDBK-245D

“The primary purpose [of the SOW] is to define as clearly as possible the
deliverable(s) for the end user and to focus project plans.” – Larson & Gray

A clear, concise description of the work to be performed on a task, delivery

order, or contract

So let's start the discussion about the statement of work and a statement of objectives with a brief
description of the statement of work. There are any number of definitions for the statement of work,
but they all essentially get to the same point. The statement of work provides a description of the
work or effort to be performed. It is an integral part of the contract as it captures what will ultimately
be the scope and deliverables for the project. It will describe the location of the work. For example, at
the contractor's facility, at the customer's facility, at an offsite location, such as a test range. It will
capture the period of performance, that is the start date and end date for the project. It will capture
the specific deliverables to be completed under the project, such as data items, prototypes, and
deliverable units. The Statement of Work will provide the basis for our planning to achieve the
ultimate goal within the funding available and the customer's time frame.

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 What is the Purpose of the SOW?

Use in Technical Project Management

Establishing a formal contract of the work

scope

Assigning work internally

Estimating scope (cost and schedule)

Tracking progress

So as we have mentioned, the Statement of Work provides a description of the work or effort to be
performed. Within the context of the contract, it provides a formal scope of the work to be performed
that the team will need to accomplish. Well we use the statement of work as we plan and break down
the effort. Particularly as we developed a Work Breakdown Structure or WBS, which we will discuss
more in another module, to be able to ultimately assign work to individuals and teams within our
company. The breakdown of the statement of work and to the WBS will provide the framework for
associating cost and time to the lower level tasks that are defined. That overall plan then provides us
as project managers the yardstick to be able to monitor the progress of our project and as issues
arise, they almost always do, to work contingencies and work arounds to resolve the issues and to
understand their impact on our schedule, cost, and performance. But it all traces back to the
statement of work in the context of other parameters stated in our contract.

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 Statement of Objectives (SOO)

Less constrained than a SOW

Avoids answering the “how” and even the

“what”

Focuses on outcomes

Fosters creativity and flexibility

So now that we have a basic understanding of a statement of work, what is a Statement of Objectives
or an SOO? Remember that a statement of work usually includes detailed requirements and pricing
with standard, regulatory and governance terms and conditions. But what happens if the customer,
often the government, doesn't yet know exactly the details, particularly performance that would
usually be part of a statement of work? That's where a statement of objectives comes in. The
statement of objectives provides basic top-level objectives for an acquisition and is usually provided
in lieu of a statement of work. It allows the performing organization the flexibility to develop cost-
effective solutions and the opportunity to propose innovative alternatives meeting the objectives. One
type of effort where this may be encountered is in research and development. It is less constrained
than a statement of work and really concentrates on the desired outcome while trying to preserve the
environment for the company to be creative.

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 SOW vs. SOO

Simple examples regarding differences between

SOW and SOO:

Landscape Maintenance Automotive Repair

• Mow the lawn once per • Tune-up the engine. (SOW)

week, weed the flower beds • Repair the engine “miss.”
biweekly, trim the shrubs (SOO)
monthly, etc. (SOW)
• Ensure the landscape is
professionally groomed and
maintained. (SOO)

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So a simple example to help illustrate the difference between a statement of work and a statement of
objectives. If we were considering landscaping, for example, a Statement of Work may state that the
company needs to mow the lawn, tram, weed, flower beds and so on. A statement of objectives may
just state that the landscape needs to be professionally maintained and leave it up to the company
about how that is done. Likewise, for possible auto maintenance, the Statement of Work may state to
tune up the engine while a statement of objectives which state to just fix the miss in the engine.
Again, these are simple examples, but they do help to illustrate the differences between a statement
of work and a statement of objectives.

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 Summary

Project Managers must complete their projects within the Triple Constraint

SOW/SOO is necessary as it defines the project.

Defines the scope, schedule and deliverables -- (SOW) or the desired outcomes (SOO)

Sets acceptance criteria and metrics -“conditions of satisfaction”

Project scope management (i.e., requirements management) begins with the SOW / SOO.

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In summary, in this module, we have discussed the statement of work and the statement of
objectives, their differences and how they, particularly in the statement of work, are a critical part of
the contractual foundation for our project. The Statement of Work defines the effort that is to be
performed and many of the parameters affecting how the work will be done and ultimately what the
outcome will be. As project managers, we need to be familiar with our contract and the details of the
statement of work that is embodied in the contract as we proceed to lay out a project charter, the
detailed plans for tasking with associated cost and schedule, execute and finally close out our
project.

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 At Work ...

For any project for which you are involved:

• Understand the importance of the associated contract.
• Identify and understand the SOW/SOO.
• Identify acceptance criteria and “metrics” for project completion.

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So tomorrow and in the future at work, when you are working or leading a project, pay attention to the
statement of work or statement of objectives for your project and familiarize yourself with the
contract. For most efforts with external companies, these exist and we'll define the parameters,
scope, schedule, and funding available that you and the project team are working within.

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