Project Management Module 2 : Project Integration and Scope Management (Created by Dr A Cabello 2020) Institution: Platform Site: ENGG951 (S221) Engineer

Project Management Module 2 : Project Integration and Scope Management
(Created by Dr A Cabello 2020)

Institution: Platform
Site: ENGG951 (S221) Engineering Project Management

Module 2 : Project Integration and Scope Management
(Created by Dr A Cabello 2020)

Printed by: Dixitkumar Pravinbhai Patel
Date: Thursday, 9 September 2021, 5:21 PM

Table of contents

1. Project Categorisation and Prioritisation (Activity 1)
1.1. Strategic Alignment
1.2. Financial Models for Prioritisation (Activity 2)
1.3. Multi Criteria Models for Prioritisation

2. Introduction to Project Integration and Scope Management

3. Project Integration Management
3.1. Project Initiation & Developing a Project Charter (Activity 3)
3.2. Developing the Project Management Plan
3.3. Directing and Managing the Project Execution Phase
3.4. Monitoring and Controlling Project Work
3.5. Integrated Change Control
3.6. Close Project Phase

4. Project Scope Management
4.1. Defining Project Scope
4.2. Collecting requirements
4.3. Create the Work Breakdown Structure (WBS)
4.4. Comprehensive Project Scope Statement (Activity 6)
4.5. Verifying Project Scope (Activity 7)
4.6. Controlling Project Scope

5. References

6. Glossary
6.1. Project Sponsor
6.2. Project management office (PMO)
6.3. Project configuration Management
6.4. Note Managing the Execution Phase
6.5. Note Monitoring and Controlling Project Work
6.6. Contract
6.7. Enterprise environmental factors
6.8. A general list of items on a project charter
6.9. Baselines
6.10. Organisational process assets
6.11. Project management information systems (PMIS)
6.12. Lessons learned
6.13. Product Scope
6.14. Project Scope
6.15. Importance of product definition
6.16. Scope Creep
6.17. Gold Plating
6.18. Project Constraints
6.19. Reports of blunders with scope definition
6.20. Quality function deployment (QFD)
6.21. An organisational unit

1. Project Categorisation and Prioritisation (Activity 1)

Prior to the initiation of a project an organisation will need to decide which projects it will choose to undertake. So a consideration of project
categorisation and selection will be included in this module. 

In general terms it can be said that projects can be categorised as:

Compliance Projects – which are those necessary to meet legal compliance requirements and therefore necessary to enable operation or
emergency projects required to enable continuation of operation. 

Operational Projects – are those designed to reduce costs, improve efficiency or improve performance. So whilst they are needed to support
current operations.

Strategic Projects – are those designed to support the organisations long term vision or evolve their current mission.

Compliance projects by their nature must be done as a first priority above all other projects – the are “Must Do” projects, whilst operational and
strategic projects have a degree of discretion regarding their implementation.

For any substantial project, many organisation’s will require that a business case be established for a project, to determine whether or not a
project should proceed past the initial conceptual stage. Some considerations and tools that might be used to justify the pursuit of a project are
contained in the subsections which follow.

Watch the following video extract from a past lecture in which the strategic nature of projects and their categorisation is discussed.


Module 2 Lecture Video – Project Categorisation & Prioritisation



 Activity 1


Q1. The portfolio of projects is typically represented by compliance, strategic, and operations projects. What impact can this
classification have on project selection?

 Submit

Q2. You manage a hotel resort located on the Queensland Gold Coast hinterland. You are shifting the focus of your resort from a traditional fun-in-the-
sun destination to eco-tourism. (Eco-tourism focuses on environmental awareness and education.) How would you classify the following projects in
terms of compliance, strategic, and operational?

 Check

Projects Classification

Convert the pool heating to solar power

Build a four-mile nature hiking trail

Renovate the horse barn

Launch a new promotional campaign with Jetstar Airlines

Convert 12 acres into a wildlife preserve

Update all the bathrooms

Change brochures to reflect eco-tourism image

Revise disaster response plan based on new requirements




Explanatory Note

1.1. Strategic Alignment

As may have been evident to you from watching the video extract in the prior section – aligning projects with the strategic goals of an organisation is a
crucial first step in deciding whether or not to proceed with a project. As an organisation grows and becomes more complex, this is often not a simple
matter and success lies in creating a process that is open and transparent for all stakeholders to review. The figure below shows a schematic of the
strategic management process and the link that should exit to all projects undertaken by an organisation.

FIGURE 1.1 The Strategic Management Process

SOURCE: Larson and Grey, 2021, p 31

The steps to ensuring that a project complies with these requirements are simple.

1. Begin with reviewing the organisational mission an identifying very clearly the purpose of your organisation ie What are we now? or what is it we
need to do well now?

2. Then identify the strategic objectives that your organisation has identified in order to achieve their strategy. 
3. Any project selected should at the very least support the strategic objectives of the organisation.

Having passed this first hurdle a project must then satisfy any financial criteria that the organisation has set as an imperative. As resources are almost
always limited, the project will need to compete with other project for resources  and its potential costs and returns may then need to be compared to
other potential projects in order to identify which of those projects most benefits the organisation.

 Question
How are projects linked to strategic plans and why is it important to link a project to the organisation’s strategic plan?


 Submit

1.2. Financial Models for Prioritisation (Activity 2)

The criteria for project selection between organisations will vary but it is very likely that the criteria will contain both financial and non-financial criteria.
Alignment with an organisations strategy, as discussed in the prior section – is an example of non-financial criteria for project selection. However, after
this has been established many organisations prefer the objective application of financial criteria where there is a high level of confidence associated with
estimate of future cash flows. The most common financial models used are:

Payback Period – which refers to the amount of time it takes to recover the cost of an investment and is calculated using the cost of the investment
divided by the annual cash flow.

Return on Investment (ROI) – tries to directly measure the amount of return on a particular investment, relative to the investment’s cost and is
calculated using the formula below.

Net Present Value (NPV) – which is the difference between the present value of cash inflows and the present value of cash outflows over a period of
time and is calculated using the formula below.



These are often combined with non-financial criteria to create Multi-Criteria Models for project selection.

Watch the following video extract from a past lecture that discusses the financial models for project selection mentioned above and their limitations.


Module 2 Lecture Video – Financial Models for Prioritisation

ROI = Current Value of Investment − Cost of Investment
Cost of Investment

NPV = ∑



= Net cash inflow – outflows during a single period tRt

 i = Discount rate or return that could be earned in alternative investments and

 t = Number of time periods


 Activity 2


Question 1. Two new software projects are proposed to a young, start-up company. The Alpha project will cost $150,000 to
develop and is expected to have an annual net cash flow of $40,000. The Beta project will cost $200,000 to develop and is
expected to have an annual net cash flow of $50,000. The company is very concerned about their cash flow. Using the
payback period, which project is better from a cash flow standpoint? Why?

 Submit


Question 2. A local manufacturer of industrial electronics needs to increase production capacity. They had been selling 480
units per year, at a price of $3,200 each, for a total revenue of $1.536 million. They are considering implementing a project to
reduced process cycle time (ie the time to make 1 unit) by 10 percent, the company can increase output by the same amount.
The Project they are considering will cost them $145,000  and the organisation only accepts projects that deliver a return of
>10% because they have other potential investments that return at least this value.
Using an ROI calculation determine if they should proceed with the project implementation? – explain your reasoning.

 Submit


Question 3. A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next
five years. It will cost $50,000 to implement the project. If the required rate of return is 20 percent, conduct a discounted cash
flow calculation to determine the NPV.
Once attempted, click the ‘Show Solution’ button below to see the worked example.

 Submit

Show Solution

1.3. Multi Criteria Models for Prioritisation

As you may have already determined from watching the prior modules, financial criteria alone do no always reflect the strategic imperatives of an
organisation. Organisations may need to be prepared to discard potentially profitable projects that are outside the realm of their core mission or which
may impact negatively on their future vision eg the development of core competences. This means that organisations have to include other criteria in their
selection process that mirror critical success factors for the organisation but may not relate to profit margins and at times might be considered to be
somewhat intangible.

In addition to identifying the criteria that is to be considered it is potentially useful to differentiate amongst criteria with respect to their relative
importance – which is where multi weighted scoring models become quite useful.

Watch the following video extract from past lectures which discusses both non financial criteria and multi criteria weighted scoring models


Module 2 Lecture Video – Multi Criteria Models for Categorisation


 Questions


Question 1. Why should an organization not rely only on ROI to select projects?

 Submit


Question 2. Consider what the pros and cons of the checklist versus the weighted factor methods of selecting projects might
be and list them.

 Submit

2. Introduction to Project Integration and Scope Management

Once a project has made it on to the organisations to do list using the analysis tools used in prior section, then comes the point in time when you must
plan and execute the project. When you undertake a project which is expected to deliver a solution to a particular problem, you will need to get your head
around what the project is about (what is the project scope?) and what exactly needs to be done to deliver the expected solutions. These two aspects,
defining and scoping a project and the project management processes required to deliver the solution, are what we will be covering in this module.

Defining a project would include identifying and organising information on how to initiate the project and then setting the required project management
infrastructure for the smooth execution of the project. The processes involved in defining a project are outlined under ‘Project Integration Management’ in
the PMBOK® Guide. However, project integration management also includes other aspects such as developing a project charter, developing an initial
project plan and putting in place measures for project control. In essence, project integration management deals with maintaining the cohesiveness of the
overall approach to managing a project. As such, integration management interacts with and unifies all nine areas of project management knowledge
referred to in Module 1. By comparison, managing project scope begins with establishing what needs to be done, and only what needs to be done, to
successfully deliver the project outcomes agreed, and expected, by the key stakeholders of a project.

3. Project Integration Management

According to PMBOK, Project Integration Management includes identifying, defining and coordinating the various processes and project management
activities within the Project Management Process Groups. It is one of the project management knowledge areas, that is specific to project managers and
where the accountability cannot be transferred to other experts e.g., cost analysis to accountants, scheduling to specialist schedule coordinators or
schedulers and risk to risk management experts. The project manager is ultimately responsible for the project as a whole and therefore they must
combine the results of all the other Knowledge Areas and have a holistic view of the project.

The table below is an extract from the PMBOK® Guide in which the processes related to project integration management are identified.

Figure 3.1: Integration and scope management processes vs. project management knowledge areas

(Source: PMBOK® Guide, 6h Ed; p. 25)

These processes are briefly described below.

4.1 Develop Project Charter – Compile a document that authorises the project or a project phase

4.2 Develop Project Management Plan – Develop the initial high-level framework for integrating and incorporating all subsidiary project plans

4.3 Direct and Manage Project Work – Provide the overall direction and guidance for performing the project work to ensure that the planned project
outcomes are delivered

4.4 Manage Project Knowledge – Which relates to the process of using existing knowledge and creating new knowledge to achieve the project’s objectives
and contribute to organisational learning

4.5 Monitor and Control Project Work – Endeavour to maintain the project performance targets, by way of monitoring progress while dealing
with variations.

4.6 Perform Integrated Change Control – Track and review all changes requested and incorporated into the project and evaluate their effect on the
desired project outcomes

4.7 Close Project or Phase – Ensure the orderly completion of all project activities

In Module 1, we introduced the project management process groups (Figure 1.1) as parts of the project lifecycle. As you can see from the above, a more
complete list is provided by the PMBOK® Guide and also includes monitoring & controlling which is generally not captured in the project lifecycle. We also
had a brief look at the nine project management knowledge areas. The above table illustrates how a knowledge area (project integration management)
relates to the PMBOK process groups.


3.1. Project Initiation & Developing a Project Charter (Activity 3)

Figure 3.2:  Overview of the process of developing the project charter

In most cases, a project needs some form of authorisation to go ahead, and the document that formally authorises a project is the project charter.  If the
project is large and is multi-phased, each phase may have its own charter. Usually, it is the project sponsor who develops the project charter, or else the
project manager may be assigned the responsibility of developing it. Apart from the project manager, key stakeholders, consultants, subject experts and
the project management office (PMO) may also get involved and use their expert judgement in compiling the project charter. These key stakeholders may
also include members of a steering committee who will ultimately provide guidance and direction to the project sponsor and project manager. Those
people involved are considered experts that may have previously involved in similar type of work in similar or varying project environments and their tacit
knowledge can be quite useful. Project managers can also draw information from a variety of internal and external sources, for example, the statement of
work (SOW), business proposal or business case and contract documents, as well as consider other environmental factors that may influence the project.
Moreover, the project charter may refer to the organisation’s current processes, policies and procedures, as a project is an integral part of the
organisational undertakings and is expected to utilise and follow the organisational process assets policies and protocols.

Watch the following Video extract from a past lecture that discusses project initiation and the project charter and which will also give you an insight into
developing a project plan which is the topic of the next section of this module.


Module 2 Lecture Video – Project Initiation

Exception – sessionwaiterr


NOTE: Please note that this video refers to a Close Out Report which is featured in Assessment 2. For 2021 this is in fact Assessment 5 which contains a
Close Out Report. The reference in the video is an old reference to a prior assessment numbering system.



Activity 3


Make a list of information that you think should be available in a project charter.

 Submit

3.2. Developing the Project Management Plan

Figure 3.3: Overview of the process of developing the Project Management Plan

The best term to describe the project management plan is to say that it is the mother of all plans in a project. Although the PMBOK® Guide has introduced
the project management plan separately under project integration management; each knowledge area contributes to the project management plan.
Therefore, the project management plan will be made up of multiple sub plans (see Figure 3.5) which are specific to each knowledge area. The
development of the project management plan will rely on the inputs illustrated in Figure 3.3 above which include; the project charter, organisational
process assets and information pertaining to the organisation where the project is being conducted, i.e. enterprise environmental factors.

The project management plan, at the initial stages of a project, will contain information pertaining to technical and management information that would
help reach project goals; the resources needed to complete the project; and the level of project configuration management (PCM) required to be
implemented and documents that would be subject to change management. Depending on the size and complexity of the project, experts with proficient
knowledge may be engaged in making decisions with regard to these aspects.

At this stage, as we are just embarking on our journey of project management, the project management plan is discussed as a pre-requisite for
scope management.  Therefore, recognising that it’s the initial planning that goes into a project, we could expect only the core components
(Figure 3.4) of the project management plan to be considered. These would include: project milestones; performance measurement baselines
that include a high level time; scope and quality baselines; identified risks; and resource availability. The performance measurement baselines
would generally include time, scope, cost and quality parameters.

Why use configuration management (CM)?

To keep track of changes.  CM is highly recommended for evaluating, tracking, approving and communicating change. Therefore, CM is very effective
in channeling information for project investigations.  Example: if a project has steered off the planned track,  CM is useful in determining a point of
rollback, where there is evidence that the project was on track.

The configuration management plan that is included in the project management plan and specifies the procedures involved in evaluating, tracking and
reporting change.

Figure 3.4: Core components of the project management plan (Source: Sherrer, 2009; p. 72)

However, once the project progresses and additional planning is completed, the following plans will need to be incorporated into the project management

Figure 3.5:  Sub plans in the project document (Source: Sherrer, 2009, p. 73)

3.3. Directing and Managing the Project Execution Phase

The process of directing and managing the project execution is concerned with ensuring that the project outcomes are delivered to meet the expectations
of the key stakeholders.

Figure 3.6: The overview of the process of directing and managing project execution

For example, if we consider the construction of a bridge, then the activities that need to be completed to deliver the final product, i.e. the bridge, is the core
of the execution process.  However, it does not merely deal with the final project deliverable, but all other intermediate deliverables that need to be
successfully completed in order to meet the final project objective. As such, if, for some reason, the project cannot go on as planned, then the project
manager should take necessary actions to mitigate the adverse impact of any disturbances on the project, so that the project objectives are met.

These actions may include: consulting with stakeholders to identify a suitable solution to a potentially problematic situation; evaluating project
performance and make necessary changes to ensure the project gets back on track; and directing or alerting the project team to address potential issues
or rectify any problems. Overall, it is the project manager’s responsibility to identify alternative paths towards project completion, when the current path is
obstructed, due to one or more reasons.


 Question

Exception – sessionwaiterr

As part of directing and managing the project execution phase, the project management plan, accepted change requests, organisational process assets
and enterprise environmental factors can be used by consultants, experts, technical gurus and the management to make judgements. This process can
be facilitated by software tools which support decision making. These tools may be automated and are commonly identified as project management
information systems (PMIS). An organisation may have an industry-standard PMIS or a custom made system built to suit specific requirements. These
tools may help the experts to evaluate the progress of the project and make adjustments if needed to keep the project on track.

Any adjustments made during this process should be followed by corresponding updates to the project management plan, project documents, work
performance measurements and deliverables.

3.4. Monitoring and Controlling Project Work

In this process, the project outputs and the project management tasks are critically evaluated to identify variances, if any, and their causes. Each
organisation and each project can be distinctly different, and therefore, an acceptable range for variance may be defined by the senior management in the
organisation on a project-by-project basis. Any variations outside this range would have to be investigated, the root cause established and a plan to
manage or eliminate the unnacceptable variance put in place.

Consider this example; a project manager calculates a lapsed time of 540 days for the successful completion of a project. However, the project is
completed in 320 days. This is a variance of over 40% to the original baseline schedule. Therefore, although the variance is positive, the PMO may need to
investigate why there was such a vast difference. This investigation could reveal useful insights into the relevant aspects of project management, for
example, were there any issues with the estimation techniques used and did this lead to an overestimation of the required time. This knowledge would be
documented as lessons learned for future reference.

Also, consider this example, the project manager learns that a project has fallen behind schedule by 15%. Based on past experience and by reading the
lessons learned documentation, they feel that they can recover from a 15% variance to the schedule, by adhering to the accepted protocols of project
schedule control used previously in documented projects. However, they will need to keep a close eye on this problem ie monitor the problem, because if
they fail to catch up or if the schedule variance exceeds 15%, they will have to take extraordinary steps to resolve the issue which may include appealing
to the project sponsor for additional resources or reduce the duration of the project. The aspects that one might consider in controlling variations to the
project plan will be covered in later modules and the case given below is a typical example that highlights the importance of post project analysis or a
project ‘post mortem’ to create a lessons learned document. The lessons learnt from this failed project would be of much use for future projects in this
particular organisation.


Figure 3.7: Overview of the process of monitoring and controlling project work

Let’s look at another example, say, that a project to build a large dam on a river has been launched, the project manager, or in this particular case (since
the project is rather large) the project management team, keeps a constant vigil on the project progress. The inputs for this process may arrive in the
following forms; the project management plan, performance reports, organisational process assets and enterprise environmental factors. This
information will be subject to analysis by experts and judgements on the progress of the project will be made accordingly. If there should be corrective
action on the construction of the dam then requests for change will be initiated, actions taken, documented and the project management plan and project
documentation will be updated.

 Activity 4

Exception – sessionwaiterr

3.5. Integrated Change Control

Change is not necessarily a bad thing and at times inevitable. There may be many reasons to incorporate change, such as, changes to business rules,
identification of new risks, and correction of errors or to incorporate omissions.  The important thing about change is that it should be identified,
documented, analysed, response(s) defined, communicated and implemented. Like the PMIS or as a part of PMIS, in some cases, automated change
control systems that assist this process (CCS) could be found.


Figure 3.8: Overview of the process of integrated change control

In the process of integrated change control, information from the project management plan, change requests and work performance information will be
considered. The individual, or preferably a panel, evaluating the changes should make sure that if these changes were to be incorporated, they should
adhere to the organisational standards and procedures, as well as the enterprise environmental factors.  

Once a change request is initiated the experts would then evaluate the change request and decide the best possible approach to dealing with it. This
could be either to incorporate the change, disregard it, or hold it till more information is received. Once the decision is made the following documents will
be updated. First the project management plan, this plan will constitute two sub plans that assist in change management; these two plans are the
configuration management plan and the change management plan. The change request itself and other project documentation will also need to be
updated reflecting the actions taken.

3.6. Close Project Phase

The end of a project or a project phase signifies an important milestone not just for the project but also for the incumbent organisation. At this milestone,
the project or project phase success or failure may be measured.  Regardless of whether a …

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