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Defining the Project Task

Copyright 2007 Dennis Lock and his licensors. All rights reserved.

This presentation describes an aspect of project management which, although not the most exciting, is extremely important.

Good project definition is the essential starting point if a project is to be managed successfully.

Project definition• Describes the project

• Specifies the project deliverables

• Sets out the scope of what we have to do

• Provides the basis for our business plan.

Project definitionSo, take a little time out to consider project definition.

What is project definition?

What has to be defined?

Why?

Discuss or jot down your thoughts before moving on.

Project definition

Have you had enough time for thought?

Here are a few of the many possible answers

Some reasons for defining a project

1 An investor or customer needs to be clear on what to expect in return for the investment.

3 If you've just been appointed project manager, you will need answers to the above questions.

2 Before a contractor can offer to carry out the project, it must know its total commitment.

• How much work and materials will be needed?

• What are the risks?• How much of the project shall we have

to do?

• General project description: what's it all about?

• What is the required performance specification?

• Scope of supply: how much shall we have to do?

• What are the contract conditions?

• What will be our project strategy?

• How much will it cost?

• How long will it take?

• Where is the project to be done?

• What’s that location like?Typical definition requirements

Project definition

Begins before the project starts . . .

. . . and ends when the project is finished

Project phase

1 Original concept

2 Feasibility study

3 Business plan

4 Risk assessment

5 Public enquiry

6 Authorization

7 Organization

8 Planning

9 Design

10 Procurement

11 Fulfilment

12 Test/commission

13 Handover

14 Economic life

15 Disposal

Five-year periods

Here is the project life cycle again . . .Here is the project life cycle again . . .

. . . to show the various stages of project definition. . . to show the various stages of project definition

Project phase

1 Original concept

2 Feasibility study

3 Business plan

4 Risk assessment

5 Public enquiry

6 Authorization

7 Organization

8 Planning

9 Design

10 Procurement

11 Fulfilment

12 Test/commission

13 Handover

14 Economic life

15 Disposal

Five-year periods

This vital part of project definition takes place before any work can begin. This is when the scene is set and the die is cast. Most of this presentation deals with project definition during these early phases.

This vital part of project definition takes place before any work can begin. This is when the scene is set and the die is cast. Most of this presentation deals with project definition during these early phases.

Project phase

1 Original concept

2 Feasibility study

3 Business plan

4 Risk assessment

5 Public enquiry

6 Authorization

7 Organization

8 Planning

9 Design

10 Procurement

11 Fulfilment

12 Test/commission

13 Handover

14 Economic life

15 Disposal

Five-year periods

Inevitably more will be learned about the project as work progresses, and the definition will become more detailed.

Inevitably more will be learned about the project as work progresses, and the definition will become more detailed.

Project phase

1 Original concept

2 Feasibility study

3 Business plan

4 Risk assessment

5 Public enquiry

6 Authorization

7 Organization

8 Planning

9 Design

10 Procurement

11 Fulfilment

12 Test/commission

13 Handover

14 Economic life

15 Disposal

Five-year periods

Project definition ends only when the project has been handed over to its customer. Then it can be defined in its final, finished, ‘as-built’ condition.

Project definition ends only when the project has been handed over to its customer. Then it can be defined in its final, finished, ‘as-built’ condition.

Equipmentvendors

Subcontractors

Design andpurchasing

Sales

specification

As-built

records

Increasing accuracy of definition

Manufacture orconstruction

Final testing or commissioning

Salesengineering

The customer or client

Original objectives

Changes

The definition of an industrial projectThe definition of an industrial project

Handover to the customer or

client

Project strategy

Deciding the project strategy is part of project definition.

Strategic decisions greatly affect project costs and outcomes.

• Shall we bid for all the project or only a part of it?

• What manufacturing or building processes do we prefer to use on this project?

• Shall we use our UK factory or the Far East?

• Are we going to build and test before shipping or erect, test and debug on site?

• Can we accept the risks that we have assessed?

• Do we need a joint venture partner?

Some examples of strategic questions:

• Do we really need to move our head office away from London?

• If we do move, should we stay in Britain?

• Which city looks most promising?

• Do we need to keep a small office in London or must the move be complete?

• What kind of compensation do we envisage paying staff who decide to leave?

• What kind of compensation do we envisage paying staff who decide to move with us?

• and so on

Or, for a business change project:

The following is a more high-level case example to demonstrate strategic project problems.

Global Mines Inc is an international mining company that specializes in producing copper and other non-ferrous metals.

• The deep mine or open pit from which copper ore is extracted

• The associated infrastructure (roads, airstrip, rail link, township, and so on)

• A processing plant where the ore is:- crushed- concentrated- smelted- and then refined to produce pure copper.

A new mine project can include

Those mines transport their ore to a mine (not too far away) that has processing plant with spare capacity.

This company’s biggest operations are in South Africa and South America.

Some Global Inc. mines do not have their own processing plant.

Processing plant

Processing plant

Global Mines Inc: Principal operations

Global Mines Inc: Principal operations

Key

MineMine

The company has recently discovered new copper deposits in Australia.

Investigations and calculations reveal that the ore quality and the size of the ore body will justify building a new mine, with at least one deep shaft.

Processing plant

Processing plant

Global Mines Inc: Principal operations

Global Mines Inc: Principal operations

Key

MineMine

The processing plants in South America and South Africa all have spare capacity.

Both the South African plants are old, relatively inefficient and costly to operate.

One of the South American plants is new, has spare capacity and is highly efficient and environmentally ‘green’.

Now Global Mines Inc now has to make a strategic decision.

1. Should it build a new processing plant for the Australian mine, at a cost of hundreds of millions of pounds?

2. Or, ship the Australian ore to the nearest (but old) processing plant in South Africa?

3. Or, ship the Australian ore to the highly efficient plant in South America, but accept the higher transport costs?

Processing plant

Processing plant

Global Mines Inc: Principal operations

Global Mines Inc: Principal operations

Key

MineMine

In this complex case many other options could be considered.

For just one example, a plant could be built in Australia to smelt the ore. Then only copper (not tonnes of ore) need to be shipped for refining.

Each of these many options will lead to a different business case for cost estimating, and financial and risk appraisal.

These are just three of the many possible strategic options that could be proposed for this project.

When compiling the business case, it is essential to define the strategic option to which it refers.

That means giving each different option a case number, so that we can be sure which option we are dealing with when carrying out cost estimating and subsequent financial appraisal.

A long and expensive feasibility study might be necessary before a strategic decision can be taken.

There is also much to remember or, worse, to forget.

Companies with long experience of projects in a particular industry will develop checklists over the years in an attempt to avoid errors of omission.

Companies about to embark upon a project where they have no experience often do well to engage a consulting company that does have that experience.

It is apparent that there is much to consider when first defining a new project.

Even when we get our business case right, a big project can fail because market conditions change. For example, a 10 per cent fall in the price of copper could make nonsense of the mining project just described.

Big projects are not for the faint hearted.

If we spend too long considering too many options, and carrying out one feasibility study after another, we can spend the entire project budget before real work begins. The new Wembley Stadium project was beset by such definition problems long before it got into construction difficulties.

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