has a stakeholder. The stakeholder (or customer) is the entity that provides the funds necessary to accomplish the project—it can be a person, an organization, or a group of two or more people or organizations. When a contractor builds a customized home for a couple, the couple is the stakeholder funding the project. When a company receives funds from the government to develop a robotic device for handling radioactive material, the stakeholder is the government agency. When a company provides funds for a team of its employees to upgrade the firm’s management information system, the term stakeholder takes on a broader definition, including not only the project funder (the company’s management) but also other stakeholders, such as the people who will be the end users of the information system. The person managing the project and the project team must successfully accomplish the project objective to satisfy the stakeholder(s).
►Finally, a project involves a degree of uncertainty. Before a project is started, a plan is prepared based on certain assumptions and estimates. It is important to document these assumptions, since they will influence the development of the project budget, schedule, and work scope. A project is based on a unique set of tasks and estimates of how long each task should take, various resources and assumptions about the availability and capability of those resources, and estimates of the costs associated with the resources. This combination of assumptions and estimates causes a degree of uncertainty as to whether the project objective can or will be completely accomplished by deadline. For example, the project scope may be accomplished by the target date, but the final cost may be much higher than anticipated because of low initial estimates for the cost of certain resources. As the project proceeds, some of the assumptions will be refined or replaced with factual information. For example, once the conceptual design of a company’s annual report is finalized, the amount of time and effort needed to complete the detailed design and printing can be better estimated.
The successful accomplishment of the project objective is usually constrained by four factors: scope, cost, schedule, and customer satisfaction.
The scope of a project—also known as the project scope, or work scope—is all the work that must be done in order to ensure that the customer is completely satisfied and that the deliverables (the tangible product or items to be provided) meet the requirements or acceptance criteria agreed upon at the onset of the project. For example, a project scope might include all of the work involved in clearing the land, building a house, and landscaping to the specifications agreed upon by the contractor and the buyer. The customer expects the work scope to be accomplished in a quality manner. For example, in a house-building project, the customer expects the workmanship to be of the highest quality. Completing the work scope but leaving windows that are difficult to open and close, faucets that leak, or a landscape full of rocks will result in an unsatisfied customer.
The cost of a project is the amount the customer has agreed to pay for acceptable project deliverables. The project cost is based on a budget that is determined by cost estimates of all necessary resources for completing the project. It might include the salaries of people who will work on the project, materials and supplies, equipment or facility rentals, and the fees of subcontractors or consultants who will perform some of the project tasks. For example, if the project is a wedding, some of the budgeted items might include flowers, wedding gown, tuxedo, caterer, cake, limousine rental, photographer, and so on.
The schedule for a project is the timetable that specifies when each activity should start and finish. The project objective usually states the time by which the project scope must be completed, which is typically a specific date agreed upon by the customer and the individual or organization performing the work. It might be the date when a town’s centennial celebration will take place or the date by which you want to complete the addition of a family room to your home.
The objective of any project is to complete the scope within budget, by a certain date, and to the customer’s satisfaction. To help assure the achievement of this objective, it is important to develop a plan before the start of the project; this plan should include all the work tasks, associated costs, and estimates of the time necessary to complete them. The lack of such a plan increases the risk of failing to accomplish the full project scope within budget and on schedule.
Once a project is started, unforeseen circumstances may arise that jeopardize the achievement of the project objective with respect to scope, cost, or schedule. Here are a few examples:
►The cost of some of the materials may be higher than originally estimated.
►Inclement weather may cause a delay.
► Additional redesign and modifications to a sophisticated piece of automated machinery may be required to get it to meet the performance specifications.
The challenge to the project manager is to prevent, anticipate, and/or overcome such circumstances in order to complete the project scope on schedule, within budget, and to the customer’s satisfaction. Good planning and communication are essential to prevent problems from occurring and to minimize the impact of these problems on the achievement of the project objective should they occur. The project manager needs to be proactive in planning and communicating and should demonstrate strong leadership toward the project team in helping them to accomplish the project objective.
Ultimately, the responsibility of the project manager is to make sure the customer is satisfied. This goes beyond just completing the project scope within budget and on schedule or asking the customer at the end of the project if he or she is satisfied. It requires ongoing communication with the customer to keep the customer informed and to determine whether expectations have changed. Regularly scheduled meetings or progress reports, frequent phone discussions, and email are examples of ways to maintain such communications. Customer satisfaction means involving the customer as a partner in the successful outcome of the project by allowing them to actively participate in many aspects of the project. The project manager must be aware of the degree of customer satisfaction throughout the project. By maintaining regular communication with the customer, the project manager demonstrates to the customer that he or she is genuinely concerned with the expectations of the customer which may prevent unpleasant surprises later.
Project Life Cycle
In project management, the sequence of project phases and phase gates is often referred to as project life cycle. Exhibit 3 shows the four phases of the project life cycle and the relative amount of effort and time devoted to each phase. As the project moves through its life cycle, different organizations, individuals, and resources play dominant roles.
Exhibit 3: Project Life Cycle
Projects are “born” when a need is identified by the customer—the people or the organization willing to provide funds to have the need satisfied. For example, for a growing family, the need may be for a larger house, whereas for a company, the problem may be a high scrap rate from its manufacturing process that makes its costs higher and production times longer than those of its competitors. The customer first must identify the need or problem. Sometimes the problem is identified quickly, as in the case of a disaster such as an earthquake or explosion. In other situations, it may take months for a customer to clearly identify a need, gather data on the problem, and define certain requirements that must be met by the person, project team, or contractor who will solve the problem.
This first phase of the project life cycle involves the identification of a need, problem, or opportunity. Once the need has been identified, the customer may request proposals from individuals, project teams, or organizations (contractors) to address the identified need or solve the problem. The needs and requirements are usually written up by the customer in
