CHAPTER 2
Defining and Authorizing the Project

THE PROJECT MANAGER IS RESPONSIBLE for achieving project results. Therefore, he must be sure he understands and can adequately convey the project’s overall goal and specific objectives. The project manager is the steward of the project scope, so even if he or she inherits a project where the project has been predefined and there is little flexibility, the first obligation of the project manager is to validate the project goals, objectives, and scope.

The aim of this chapter is to help you understand how to define the goals, objectives, and scope of your project and secure agreement from key stakeholders. At the highest level, the goals and objectives of the project are defined in clear, simple, nontechnical language. Later in the process, the scope of work is developed and refined in more detail. It is important to document the intended outcomes of your project in terms of the current condition and what it will be when the project is completed. During the initiation phase, you should establish critical success factors and critical success measures.

The Role of Stakeholders in the Authorization Process

Stakeholders are individuals and organizations who are affected by or have an interest in the project. They include those who benefit from the project, those who contribute to the project, and those who are impacted by the project. It is important to identify all project stakeholders as soon as possible. Recognize that any of the stakeholders may exert positive or negative influence over the project and its results. Key stakeholders common to many projects include sponsors, customers, users, project managers, project team members, and subject matter experts.

The Business Case for Undertaking the Project

It is important for the project manager to understand the business reasons for the project being undertaken. This is articulated as the business case. Be sure to consider all reasons, not just the financial justifications, for pursuing the project. The following need to be fully understood by the project manager:

Problem or Opportunity. State the problem that the project is intended to resolve or the opportunity to be taken advantage of.

Solution and Vision. Describe what the situation will look like after the project is completed.

Expected Benefits. Enumerate the benefits to be derived from the project.

Estimated Costs. Give a high-level estimate of the personnel and expense costs of the project, based on the available information at this stage of the project. Understand that this estimate will be revised as the project is better defined.

Projects should be seen as investments and should produce beneficial results, which may be defined in a variety of ways. One way is to justify a project on the grounds that it ensures an organization’s survival. Here, the project is mandatory rather than discretionary. It must be done either to comply with government or industry standards, or to sustain operational readiness—for example, repair a leaking roof or an essential manufacturing tool.

Other projects might contribute to improved profitability. Projects in this group may provide improved cost controls, margin management, business-process reengineering, system upgrades, streamlined workflows, and strengthened customer satisfaction through product and service improvements. Projects in this area could also include product launches or advertising campaigns, trade show exhibits, packaging changes, office relocations, and organization restructuring.

Finally, there are some projects that try to secure the long-term growth of the organization. These strategic projects may seek to extend plant capacity, deploy new or emerging technologies, or bring new products and services to the market.

Regardless of the underlying reason, every project takes on the appearance of an investment—the need to produce significant benefits within the constraints of time, cost, and scope. Strategic projects, by definition, try to leverage investments so that short-term dollars yield longer-term revenue and profit dollars. The key is that every project must be aligned with something bigger than itself. Each project should be linked to some enterprise goal, objective, or strategy. Ask yourself the extent to which a particular project is aligned along these parameters:

Business goals and objectives

Business strategies and timetables

Corporate culture, core values, and beliefs

Organizational structure

Operating policies, practices, and procedures

Business systems

Professional and ethical standards

A helpful tool for determining the business case is to conduct a SWOT analysis—a review of the internal and external environment to determine the Strengths, Weaknesses, Opportunities, and Threats. This is a classic tool used in strategic planning and capital budgeting. At the project level, it may provide a rationale or justification for the project, or it may uncover important information that is helpful in matching the organization’s resources and capabilities to the competitive environment in which it operates. Strengths and weaknesses are environmental factors internal to the organization; opportunities and threats address external or market issues.

The Goal Breakdown Structure

The goal breakdown structure is a logical and hierarchical structure that demonstrates, at increasing levels of detail, the results that a project should achieve. The specific names shown in this hierarchy are representative, not mandatory. Use terms that apply to your enterprise or organization. The following is one scheme you could use in a goal breakdown structure:

Level zero defines the project’s goal —a clear, nontechnical description of the desired result or outcome of the work. Some organizations define the highest level of a project or program as the project’s mission or vision. What is important is that everyone agrees on the outcomes sought.

Level one defines project objectives —generally no more than five to ten essential attributes or characteristics of the project’s goal statement. Taken together, these objectives document the project’s critical success factors—statements of qualitative criteria describing what will make the project successful. For example, the statement “Minimize time to completion” is a critical success factor.

Level two defines the requirements or the critical success measures of the final product, service, or result. These are statements of quantitative criteria, each of which provides a measure of one or more of the project’s critical success factors. For example, the corresponding critical success measure to the aforementioned critical success factor would be the statement “Complete by January 6, 2015.”

Level three establishes the specifications for intermediate and final deliverables of the project. Specifications can be thought of as detailed descriptions of how something will work and its relationship(s) to its nearest neighbors.

The generic concept of goal breakdown structure levels is shown graphically in Figure 2-1. Figure 2-2 shows the levels in the familiar Noah’s Ark project.

Figure 2-1 The Goal Breakdown Structure (GBS).

Let us now look at more recent project examples to illustrate this idea. Figure 2-3 is a starting point for developing a goal breakdown structure with three illustrative projects: one in marketing, one for information technology, and a third for an imaginary medical device.

Figure 2-2 Goal Breakdown Structure Levels in the Noah’s Ark Project.

Figure 2-3 Detailed Goal Breakdown Structure.

Consider the following as you develop goal breakdown structures:

Senior management “owns” the goal statement. If it fails to endorse or support a fundamental statement of project purpose, your issues as project manager will be overwhelmingly political rather than technical, organizational rather than operational, and personal (and personnel) rather than scientific.

Functional managers, users, and clients “own” critical success factors and their essential metrics. Deriving and documenting these items is likely to take more time and effort than you imagined.

Subject matter experts “own” the specifications in the execution and implementation stages of the project. Expect robust debate and dramatic conflict when the worlds of experts collide!

Project Charter

The project charter is the document that formally authorizes a project and defines the initial requirements that satisfy the stakeholders’ needs and expectations. It explains the business needs the project addresses, states the high-level project requirements, and defines the approvals and authority granted to the project manager by the client or senior management.