Project Management: Scope
When your company has the opportunity for a new project, it can be very tempting to accept any offer that comes your way. However, it is important that the scope of the project is carefully reviewed and analyzed in conjunction with your accountant or accounting department to make sure that the objectives are in line with company goals and perform a risk assessment to ensure tolerable risk.
Project Management includes collection of the requirements necessary to fulfill the obligations, or scope, of the project. This information is typically provided by the client through a contract or scope of work. The creation of the scope statement helps define the project by identifying the outputs and how it should be executed. The scope statement should be reviewed regularly during the project to make sure that there is no scope creep or gold plating. Scope creep can easily happen when the initial requirements are poorly defined or lack initial clarity. Interpretation of what the client wants can quickly throw your budget off track as assumptions are made that were not original considered during the creation of the budget. The other common cause of scope creep often happens when the company executing the project has conversations with the customer that informally change the scope through small requests. Over time, because the changes were not documented or budgeted, projects can grow out of scope and over budget.
The other common problem that is seen is Gold Plating. In an attempt to please the client, changes to the scope are made to “make the project better” by adding additional features or completing items outside of the original project description. As with scope creep, this too leads to the project being out of scope and over budget. This can lead to unaccepted deliverables and potentially an unhappy customer.
When determining the scope of the project and aligning it with the company’s goals and budgets, often alternatives analysis is used in conjunction with cost benefit analysis. When a complex scope is broken down, it allows the project manager to produce multiple approaches to the situation that each comes with their own risks and rewards. When combined with cost benefit analysis, the project manager will be able to forecast the impacts of each approach, including monetary costs and benefits, to determine the best path forward when creating the Scope Baseline.
Once a project is completed, it needs to be closed out. In relation to scope management, the project manager should review variances in the costs and schedule of how the project performed versus the original plan. An evaluation of changes to the scope and special circumstances should also be done to determine their overall impact on the project. This information should all be documented and maintained as part of the company’s historical records. Understanding why a project performed the way it did allows for more accurate project planning in the future.
