Three Critical Project Management Terms to Know

Like any other area of expertise, project management has its own set of terms you must know to be successful. Although the list can get extensive, start with learning how the following three words apply to project management. Understanding the critical terms of scope, assumptions and risk will start you off on the right foot and be the foundation for planning the rest of your project.

Scope

In project management, scope is a set of boundaries that define the extent of a project. These boundaries determine what falls inside or outside the project and what is included or not, in planning. Activities that fall inside the boundaries are considered “in scope” and are planned for in the schedule and budget. If an activity falls outside the boundaries, it is considered “out of scope” and is not planned for. Whether you’re a project manager or part of the project team, you’ll want to consider if something is in scope or out of scope as you move forward.

Let’s say a client has asked you to build a website. As you outline the scope (or set the boundaries) of the project, you state that it will include the designing and building of the website. As the project progresses, you might discover that there is also a video that the client would like to create. Since the video is not part of the designing or building and therefore falls outside the boundaries of the project, it is considered out of scope.

So how do you determine what is in or out of scope? You’ll first want to outline all the details of the project you currently know based on discussions with the client or the project owner. Then you’ll want to make key assumptions that will drive what’s considered in or out of scope.

Assumptions

At some point in your life you’ve probably been told, “Never make assumptions.” However, making assumptions in project management is crucial. Making assumptions will help you outline and control the scope of a project, ultimately affecting the schedule and budget.

Consider something simple, such as creating a book. Let’s say your friend has an idea for a coffee table book and has asked you to manage the project. His first request is for a budget so he can secure funding. As you define the scope, it’s clear that your friend is uncertain on many details, mainly: how many pages will the book have? Since the number of pages will greatly affect the cost, you will have to make an assumption in order to effectively provide a budget.

After further discussion, your friend tells you he plans to include 50 photos in the book. You can base your assumption on the 50 images, and then include pages for text, title and reference pages. When you formulize the budget you can indicate that the budget is based on the assumption that there will be between 75 – 90 pages in the book and any number of pages greater or less will have a direct impact on the budget.

You can see how assumptions directly affect schedule as well. For instance, let’s say you’re leading a project at a park that involves building a swing set. When setting up your project you are given the budget and assigned team members, one of which is in charge of materials. As you create your schedule you ask the person in charge of materials when the cement will arrive. This person replies that he’s not sure when the cement will arrive but that he believes it will be between June 1 and June 10. As you build your scope and schedule, you make the assumption that the cement will arrive no later than June 10. This example shows two benefits for making assumptions.

The first benefit is that the assumption of receiving the cement no later than June 10 allows you to plan for activities that rely on the cement arriving. The second benefit is that it provides the person in charge of materials with a deadline to deliver the cement, which he can then relay to his supplier. It has inadvertently set up a key deadline for the project to move forward.

Making assumptions sets benchmarks that are often revisited during the project to aid the project team in staying within scope, on time and within budget. But what happens when assumptions are wrong? This is where risk comes into play.

Risk

Once you’ve built your scope and made certain assumptions, you’ll want to begin assessing areas of risk. Risk is the same in project management as it is in the real world; it is a hazard or chance that can create damage. All projects contain risk and if you are the project manager or project owner, it’s not only your responsibility to anticipate risk but it’s also your job to communicate the potential impact of those risks to the project.

First and foremost, risk comes in various degrees. Sometimes risk can just mean the project will run slightly differently or take a small unexpected turn. In some cases, however, risk can lead to catastrophic results that can turn your project on its head.

Let’s take the playground scenario from the above cement example. Where is the risk? The risk is that the cement could not arrive by the assumed date of June 10. What are the potential effects of this risk? The effects could be mild: it could set the schedule back a day or two. Or they could be severe: it could set the schedule back weeks or months.

When you present your project plan to the rest of the team, you’ll want to clearly articulate what the current risks are and their specific impact on the overall project. It is helpful to highlight these risk areas in red or on their own separate page. Describe the risks in detail and briefly explain the impact of them on the plan. Throughout project communication, remind the project team of these risks and what they mean to the overall projects success.

If you’re thinking about a new project or kicking off your first, keeping these three critical terms in mind will allow you see the big picture and avoid potentially damaging risks that can derail your progress.

(by Katie Stricker, www.management.about.com)

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