RMC
Learning
Solutions
TM
Essential Elements
to Effective
Project
Management
Delivering Projects On Time, On Budget, and In Scope
A White Paper from
RMC Learning Solutions
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6 Essential Elements to Effective Project Management
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6 Essential Elements to Effective Project Management
Table of Contents
About the Editor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6 Essential Elements to Effective Project Management . . . . . . . . .6
•
Create a Project Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
•
Identify Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
•
Develop a Project Scope Statement . . . . . . . . . . . . . . . . . . . . . . . 9
•
Create a Work Breakdown Structure (WBS) . . . . . . . . . . . . . . . 10
•
Identify and Analyze Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
•
Create a Communications Management Plan . . . . . . . . . . . . . . 12
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
About RMC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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6 Essential Elements to Effective Project Management
About the Editor
Sonja Almlie, PMP, CCBA, PMI-ACP, CSM
Senior Instructor
As one of RMC’s most senior instructors, Sonja Almlie has
trained thousands of project managers on a variety of topics.
As subject matter expert for the 8th Edition PMP® Exam Prep
book, she brings extensive industry-specific experience in the
financial services, non-profit, and transportation sectors. With
over 20 years of experience, she offers a wide range of real-world
experience managing projects in IT, web technology, process
optimization, usability, and marketing. Sonja is a certified Project
Management Professional (PMP)®, holds the Certification of
Competency in Business AnalysisTM (CCBA®), is an PMI Agile
Certified Practitioner (PMI-ACP)®, A Certified ScrumMaster®, and
Connect with Sonja
linkedin.com/pub/sonja-almlie
holds a certificate in Project Management from The University
of St. Thomas. She is a speaker and presenter of engaging and
energizing presentations to PMI® congress, local chapters and
their development days, and to other organizations.
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6 Essential Elements to Effective Project Management
Executive Summary
Organizations invest millions of dollars each year on new projects
and programs. History has shown that the costs and challenges
associated with these projects may outweigh the benefits if not
managed correctly.
32%
Software spending in the United States jumped from 32 percent
of total corporate IT investments in 1990 to almost 60 percent
in 2011 1 as software gradually became critical to almost every
organization’s performance.2 In 2013, the U.S. government will
spend $79 billion on information technology.3
US Software Spending in 1990
A recent study of large scale IT projects found that 17 percent
of those projects went so poorly they potentially threatened
the viability of the company. These large-scale projects ran 45
percent over budget and 7 percent over time, while delivering 56
percent less value than expected. 4
The story is similar with government IT projects. According to the
60%
Office of Management and Budget, one quarter of all government
IT projects are mismanaged.5
These time, cost, and mismanaged risks to business and
US Software Spending in 2011
government institutions are significant threats to completing
work faster, with greater effectiveness and efficiency. To avoid
these risks, enterprises and agencies alike need to make sure
projects align with their organizational strategy and focus on
solving the problem or serving the need. To do that, project
managers need to define and clarify stakeholders’ needs,
evaluate solutions and risks, plan appropriately,
and communicate with the stakeholders.
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6 Essential Elements to Effective Project Management
6 Essential Elements to Effective
Project Management
How do organizations maximize their projects to deliver the
expected value on time and within budget? The keys to success
lie in mastering six essential elements for every project and
delivering significant value and return on investment.
The following elements make up this successful approach:
1. Create a Project Charter
2. Identify Stakeholders
3. Develop a Project Scope Statement
4. Create a Work Breakdown Structure (WBS)
5. Identify and Analyze Risk
6. Create a Communications Management Plan
“The 6 essential elements
to effective project
management are the
backbone of any great
project management
practice. They are
applicable for all projects,
not just IT.
As project managers, we
have the responsibility to
be stewards of the
resources—people,
money, time, materials,
equipment, facilities,
etc.—that are
entrusted to us.
Using these elements
improves the reliability
and quality of our impact
on project success.”
- Sonja Almlie
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6 Essential Elements to Effective Project Management
1. Create a Project Charter
The project charter is a document issued by the project’s sponsor
that authorizes the project and gives the project manager
authority to do the work. Think of a project charter as a target; the
high level scope and direction of the project and the objectives
that it must meet to be considered a success. It will be used to help
keep everyone focused on what needs to be achieved throughout
the life of the project. The project needs to be planned to reach
this target.
A project charter should include a high-level description of the
project. It should include the business need and the financial or
other basis justifying the project (business case). Charters for
top-performing projects establish a clear view of the initiative’s
organizational value by addressing the business case in the charter
and maintaining focus on meeting the business objectives of the
project. Successful project managers and teams can avoid cost
overruns, ensure customer satisfaction, and deliver the scope
within schedule constraints.
A project charter provides the
following benefits:
•
•
•
•
Formally recognizes
(authorizes) the existence of
the project; it establishes the
project
Gives the project manager
authority to spend money and
commit resources
Provides the high level
requirements for the project
Links the project to the ongoing
work for the organization
As you work on documenting the charter, you need to identify any
pre-assigned resources that may influence how the project will
be planned. Some projects come with constraints on the number,
location, or type of resources.
The project charter should also identify the key stakeholders who
affect or will be affected by the project or product, as well as their
known requirements.
Major deliverables and the end result of the project should be
documented at a high level in the charter as part of the product
description and deliverables. It is important to know the intended
end results of the project and if there are any project constraints,
such as time or cost, as they may limit how the project is delivered.
This allows for the development of a project management plan
that defines ‘done’ and helps ensure a clear picture of what
constitutes the end of the project. Assumptions are documented in
the charter; then during planning, we can analyze if they are valid.
Finally, the charter should include measurable project objectives—
how the project will be evaluated for success or failure, who will
sign off, and the authority level assigned to project manager. Keep
in mind, the project charter serves as a definition of how success of
the project and the project manager will be measured. Without a
charter a project’s success, efficiency, and effectiveness are affected.
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6 Essential Elements to Effective Project Management
2. Identify Stakeholders
A charter should identify key project stakeholders, but this is only
the high level. Detailed stakeholder identification needs to be
performed. This includes internal and external stakeholders, such
as business executives, leadership team, SMEs, team members,
departments, end users, vendors, customers, partners, and
regulators. It is important to identify anyone who can affect or
Stakeholders are people and
organizations who:
•
•
Are involved in or impacted by
the project or product
Can positively or negatively
impact the project or product
be affected by the project or the product. Anyone who has any
interest in the project, including those who might be opposed
to the project or portions of it, are stakeholders. To help you
identify more stakeholders, ask them: “Who do you think are the
stakeholders?” You don’t want to miss any.
When identifying stakeholders, the project manager must also
elicit, document, and evaluate stakeholders’ product, project, and
project management requirements and expectations. They have
to be evaluated against the charter and project management plan
to make sure the project stays within scope, builds the needed
solution, and delivers to the business need.
Successful project managers identify and properly involve
stakeholders in the project planning and continually engage them
throughout the project. Good project managers understand their
stakeholders’ requirements, expectations, influence and impact,
and use that analysis and planning to engage them throughout
the project.
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6 Essential Elements to Effective Project Management
3. Develop a Project Scope Statement
Another important element of successful projects is the Project
Scope Statement. It describes in detail the deliverables (the
product scope) and the work needed to create a product,
service, or result (the project scope). A scope statement is
created with input from stakeholders and involves analysis of
the project translating objectives into deliverables. Requirements
and requirements analysis should be as complete as possible
before planning starts, to obtain clear direction and agreement
Product Scope:
Describes the product, service,
or result of the project with its
features and functions
Project Scope:
Describes the work needed to
create or produce the product,
service, or result
on the expected project scope. If this has not been completed,
the project manager is responsible for leading the efforts of
requirements management. Scope should be in writing to prevent
miscommunication. It supports the work to properly plan the
project and demonstrate success when the project is completed.
The scope statement format may vary based on the needs of the project. Many of the topics addressed in the
project charter are covered in more detail in the scope statement. A project scope statement should contain:
Product scope description:
Overall description and characteristics of the project’s product, service, or result
Project scope description:
Work to produce the product
Project boundaries:
What is and is not included in the project
Project deliverables:
Specific items to be created, produced, or delivered
Acceptance criteria:
Documentation of what will be acceptable
Project constraints:
Detailed time, cost, and other factors that affect scope
Project assumptions:
Detailed list of what is assumed to be true that may not be true
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6 Essential Elements to Effective Project Management
4. Create a Work Breakdown Structure
(WBS)
A WBS is a, graphical decomposition of project deliverables. It is
the “family tree.” It organizes, defines, and displays deliverables
A WBS Example:
to achieve final project objectives and provides a way to break
down project deliverables into smaller, more-manageable
components or work packages. These work packages provide the
basis for more accurately scheduling; budgeting; communicating;
allocating responsibility, risks, procurements, and quality; and
controlling the project. A WBS is so valuable that it should be
done for even the smallest project.
There are many benefits to using a WBS including:
•
Ensures that deliverables are not missed, helps prevent
changes, and supports identifying risks by work packages
•
Provides the project team with an understanding of where
they fit into the overall project management plan
•
Facilitates communication, stakeholder engagement, and
cooperation between the project team and other stakeholders
•
Provides the basis for estimating staff, cost, and time
•
Focuses teams on what needs to be done, which can improve
project performance
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6 Essential Elements to Effective Project Management
5. Identify and Analyze Risk
Risks are discrete occurrences that may affect the project either positively or negatively. These are potential
opportunities or threats. Opportunities can improve project performance (reduce the cost or schedule,
improve quality, etc.). Threats may delay the project, increase costs, reduce the level of quality delivered,
etc. The purpose of risk management is to identify as many potential opportunities as possible and to plan
the project in such a way as to take advantage of them. Risk management seeks to identify and eliminate
as many potential project threats as possible, and then reduce the negative impact of the remaining project
threats. Use risk management to prevent problems rather just dealing with them after they occur.
Benefits of Risk Management include:
•
Saving on project cost and time
•
Greater control over the project
•
Fewer hours spent dealing with problems; solutions have been planned to improve efficiency if the
risk occurs
•
Minimizing scope creep. Scope creep refers to uncontrolled changes or continuous growth in a project’s
scope. This can occur when it is not properly defined, documented, or controlled.
For best results, take advantage of a systematic process for risk management. Using the process outlined
below, the project manager spends more time managing the creation of project deliverables. Should a risk
actually arise, the project manager can implement planned risk responses (contingency and fallback plans)
rather than determining a course of action when a problem has occurred, allowing for proactive project
management.
Plan Risk Management:
Determining how risk management will be done on the project, who will be involved, and
what procedures will be used
Identify Risks:
Determining specific risks by project and work package or activity
Perform Qualitative Risk Analysis:
Subjectively analyzing the probability and impact of each risk (for example: using a scale of
1 to 10 for each risk)
Perform Quantitative Risk Analysis:
Numerically estimating the cost and time impact of the risks
Plan Risk Responses:
Determining a course of action to reduce the overall risk to the project by decreasing the
probability or impact of threats, and increasing the probability or impact of opportunities
Control Risks:
Executing the risk response plan to manage risks and control overall project risk
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6 Essential Elements to Effective Project Management
6. Create a Communications
Management Plan
Communication is always difficult, especially when you deal with
virtual teams, global projects, and competing requirements. Our
Communications planning involves
asking questions such as:
studies show that communication issues are the number one
•
preventable problem on projects. A project manager spends
90 percent of his or her time communicating. The secret to
good communication is to realize that communications must be
planned.
•
•
The first steps towards a good communication plan start with
stakeholder management (identification of stakeholders, their
Would it be better to
communicate the information in
an email or telephone call?
Is this an issue that I should go
to see the person about?
Is the communication important
enough to call a meeting or
simply create a report?
requirements and expectations) and using the project scope
statement and the WBS that have been created. Communications
management planning benefits from this understanding and
detailed documentation.
Ideas to consider in your communication plan:
•
What needs to be communicated and why?
•
Best method for communicating:
--
What reporting format does the sponsor require?
--
What reporting format do you want from the project
team?
--
Who is responsible for sending information; when and
how often?
•
How will you clearly delineate project roles and
responsibilities?
•
What methods should the team use to bring problems or
issues to your attention?
•
Where does the project fit into the organizational initiatives,
portfolio, and programs?
•
How will changes be communicated?
•
New risks
•
Project status, project charter, stakeholder expectations,
project management plan, and WBS
•
Problems, changes, updates to components of the project
management plan, upcoming work, and delays
Remember, good communication must be planned into the
project, managed throughout, and meet the needs of the
stakeholders.
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6 Essential Elements to Effective Project Management
Conclusion
Project management is a systematic process used to initiate,
Sources:
plan, execute, monitor and control, and close a project to meet
1. “Private fixed investment in equipment
and software by type,” table group 5.5.5,
Concepts and Methods of the US National
Income and Product Accounts, US Bureau of
Economic Analysis, November 2011.
a defined set of objectives. At RMC Learning Solutions, we
help your teams understand the science and the art of project
management, giving them the knowledge and skills to ensure the
success of projects.
Focusing on the six essential elements we’ve outlined above
will give you the greatest benefit, whether your company is
experienced at project management or just working to deliver
better project results. Working to incorporate or improve your
individual or organizational practices of these six essential project
management elements can make a difference regardless of the
size, industry, or type of project.
2. For more information, see Hugo Sarrazin
and Johnson Sikes, “Competing in a digital
world: Four lessons from the software
industry,” February 2013.
3. http://breakinggov.com/2012/02/13/whitehouse-proposes-modest-trim-in-2013-federalit-spending/
4. Study on Large Scale IT Projects, McKinsey
& Company and the University of Oxford,
2012.
5. “Information Technology: OMB and
Agencies Need to Fully Implement Major
Initiatives to Save Billions of Dollars,” Office of
Management and Budget, January 2013,
http://www.gao.gov/assets/660/651376.
pdf1/2013
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6 Essential Elements to Effective Project Management
About RMC Learning Solutions TM
RMC Learning Solutions develops and trains project managers,
business analysts, and Agile practitioners by helping them learn
the skills necessary to succeed in their careers. We deliver a wide
range of training in multiple learning formats across the globe.
Founded in 1991 by Rita Mulcahy, the company continues to
develop and provide innovative, real-world tools and instruction,
delivered by professionals with extensive experience and a
working knowledge of industry best practices.
For more information visit shop.rmcls.com
10953 Bren Road East • Minnetonka, Minnesota 55343 USA
Main 952.846.4484 • Fax 952.846.4844 • E-mail [email protected]
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