Project Planning as the Primary Management Function
Martin Dean Martin
Air Force Business Research Management Center
Wright-Patterson AFB, Ohio
Battelle Columbus Laboratories
Project planning as a process is output oriented. It is concerned with deciding in advance what, when, how, and who will take the necessary actions to accomplish established objectives. In this context planning is a pervasive management function which is accomplished by all levels in the project hierarchy(l), the difference being scope, detail, and the magnitude of the effort. Planning forms the foundation for future actions, using the past as a guide. The purpose of this paper is to examine the project environment for planning, to consider the purpose of planning, to focus on the stages of project planning, to evaluate the elements of planning for the project, and to discuss the role of decision-making in project planning. The first concern is the planning process and environment. The basic planning process is illustrated in Figure 1.
The process involves inductive problem solving.(2) It initially focuses on the “what” and “how” which are closely related. What is to be accomplished is defined in the project objectives that must be developed at the beginning of the planning process. These objectives may relate to new product development, acquisition of market share, maintenance of market share, anticipated sales volume, profit maximization, some combination of these or some other desired objective. The objectives become the “reason to be” for project personnel. All subsequent activity should be devoted to their accomplishment through planned future time periods. As soon as they are completed, by definition, the project is over. The “how” concern for planning evolves around the selected objectives and the nature of the product, the state of technology, the characteristics of the target market, company policy, and available manufacturing or developmental processes. Needed technical and production skills will be affected by the how concerns.
Requisite facilities, equipment, supplies, raw materials, and manpower skills have to be identified and scheduled for purchase or hire. Delivery times must mesh with the product’s production schedules and timeframes. These resource decisions comprise the input considerations delineated in Figure 1, and constitute the “who” and “when” aspects of the planning process. Management of such resources is internal to the project, but acquisition of them is through external channels. There are two external categories of concerns for project planning which must be considered, i.e., the organizational environment for the project and the environment which is external to the company as a whole.
Several organizational approaches to project management may be used for the firm’s structure, such as matrix, projectized, etc.(2) Each has its advantages and disadvantages and will be suitable in specific instances depending on top management policy, product attributes, and other factors. Regardless of the organizational format, each project manager will have to compete with other projects for a share of the firm’s limited resources. Planning facilitates this competition in that detailed plans of high quality with cost and schedule information provide credibility and validation to resource requests. The project manager will have to consider as a part of planning the format and procedures characteristic to the specific organizational structure and their impact on the acquisition of resources. The project’s success in obtaining and maintaining resources will be dependent on its relative priority in the organizational hierarchy and its efficient use of resources as measured by return on investment or some other financial or managerial criteria .(3) The manager does not control the environmental variables external to the project even within the firm; however, with proper planning he should be able to influence budgets and other resource allocation mechanisms.
Other variables which the project manager must include in planning exist outside the overall organization. As in the case of the organizational climate, the project manager usually cannot control these variables, but with proper planning he possibly can influence them or minimize their impact on his project. These variables include factors such as the firm’s competition in the market place, governmental regulations, technological change, and various social constraints. Thus it can be seen that planning is critical to the probable success of the project. Its several contributions in this area will be considered next.
Purposes of Planning
Project planning is a form of communication and a source of information for project personnel.(4) Once the project’s overall objectives have been formulated and approved, they must be transmitted to the project staff. Through their involvement in the process of developing specific objectives, the hope is that a congruence will be attained between personal goals and the objectives of the project. As the details of the plans are scheduled and costed, information for action is provided to all levels of the project staff.
Foundation for Management Action
Planning also furnishes the foundation for all other management action. Knowing what is required, who is to perform certain tasks, how they are to be performed, and when the events should be scheduled allows managers to organize their activities in a more efficient manner. Inherent in the planning function is the need for control. With the plan’s implementation, feedback is obtained relative to progress in objective and goal completion. Evaluation of actual compared to planned figures permits the manager to assess progress objectively, to make necessary adjustments to the master plan and to take corrective action for ongoing operations. Also the plan provides the manager with information as to deadlines and scheduled events, providing a cue as to when decisions have to be made and as to when feedback systems need to be activated and monitored.
Problem Definition and Solution
Planning is a form of problem solving and as such promotes problem definition and solution. The delineation of objectives and the subsequent breakdown into goals and objectives help to identify problems and aid in the formulation and analysis of alternate strategies to meet objectives. Each alternative must be evaluated in terms of schedule and cost and requisite product quality of performance. Tradeoffs between these critical variables may be necessary in the initial planning phases and later can be used to create work-around plans as difficulties are encountered. This approach requires the development of a detailed action plan which will be the topic of subsequent paragraphs.
Stages of Project Planning
Probably the most difficult stage of any project is the beginning. Often times there exists a vague or poorly defined objective and getting started presents a problem, since a clear sense of direction does not exist. At other times the decision of how to get there is confused with deciding where; the project is specified prior to a clear delineation of objectives. This concern in the Department of Defense (DoD) led to the implementation of OMB Circular A-109 which requires a statement of need preceding any action. Too often the availability of technology defined the need, instead of the need determining the required technology.
Definition of Project Objective
The first stage of successful project planning, therefore, is a clear definition of the project objective. Ideally this should be a single sentence, e.g., “The objective of this project is to simplify the tax return so that an ordinary citizen with an eighth grade education can complete the short form in three hours or less without professional help.” This objective is clear, attainable, measurable, and specific.
The next stage is to describe the project. The better a project can be described, the more likely it is to be a success. Ten basic questions should be included in the description and they are listed in Figure 2.
The answers to these questions should appear in program documentation or the project will probably become a statistic, as one of those projects that failed – either through cost or schedule overruns, or in failing to meet specifications.
WHAT is to be done? This question is addressed in the goals and objectives. The terms goals and objectives are often used interchangeably, but for our purposes objectives will be defined as the end result of the project, and the goals sequential steps, which, if completed, will result in successful project accomplishment. Both must be clearly stated to assure that all project efforts are directed to the correct outcome.
WHEN will it occur? Schedules must be constructed to time-phase the selected goals and tasks and to identify interrelationships. There is a Master Schedule, as a minimum, and usually some subordinate schedules are created to define the limits of the project and some of the intermediate steps.
HOW much will it cost? Although the initial planning estimates are just that, it is important to scope the project very early. A preliminary estimate was used to evaluate the project in terms of other alternatives. As the planning progresses, budgets must be developed in order to translate this estimate into the specific resources needed to accomplish a given task.
WHO will do it? Deciding what functional department will support the project manager can be a very political decision and a highly significant factor in the success or failure of a project. Sometimes the most knowledgeable person is not the best at coordinating the efforts of a diverse team. In addition, few projects are a one-man show, and manpower availability must be considered carefully.
WHAT product or service will be delivered as a result of the effort? It is relatively easy to lose sight of the true purpose of a project. As an example, in an automatic data processing (ADP) project, the product should not be the computer program, but rather the output it is supposed to generate. The output of the programmer might be the program itself, but he should not lose sight of the overall project objective. The use of elaborate programming techniques may not add anything to the overall project, and actually may defeat the purpose of it.
WHAT is the responsibility of both the developer and the user? Some projects originate from the bottom up -that is, the user identifies the need, and an analyst must work with him to develop the solution. In other projects, the top management determines a need that is not being met. The developer must still find the solution, but in addition the user must be educated so that the system is used correctly.
WHAT determines task completion? It has been said that engineers never know when to quit. An optimum solution is never reached, only a “good” one, so work continues as long as funds are available. There are exceptions to the saying, “Anything worth doing is worth doing well.” Sometimes it is sufficient to do it adequately. If a man is being sent to the moon, the specifications must be more rigidly adhered to than if the annual Christmas party is being planned. Many individuals have had the experience of working a project to death, long after the basic problem had been solved. The increased return is marginal to the increased investment, both in money and manpower, and the project should be terminated. To avoid this situation, the criteria for task completion should be determined before the project is begun.
WHO is responsible for accepting the product as completed? Many people will have an opinion as to what should be done and how it should be accomplished.Others have a legitimate interest in the project and will have to work with its output. The project manager must always keep in mind who is the final authority. The project must be completed to his (her) satisfaction first. If, in the process, other people’s needs can be accommodated, that is a desirable side effect. Efforts to satisfy everyone will cause resources to be needlessly consumed.
WHAT mechanics will be employed to deal with formal changes? Change is an environmental constant. Recognize immediately that it will take place, and design a procedure to deal with it. This may be a review committee, an appeals process, a coordination chain, or some combination of them. Tracking changes, and recognizing their implications, can keep a project from an out-of-control condition.
HOW will actual progress be measured? Very few projects are anything but right on schedule when measured subjectively. If the project leaders have not defined achievable intermediate milestones that can be quantitatively measured, it is difficult to estimate progress. Many projects are identified as “level of effort” because they represent excursions into new territory. Most projects represent new undertakings. What is required is to break the project into small segments which have been done before, e.g., engineering drawings; and testing steps; etc. A number of quantifiable activities exist even in the most innovative undertakings.
Detailed Work Plan
Once the project has been adequately described, the steps required to achieve the objective must be documented. This is the appropriate stage for a discussion of technology application. If you’re building an aircraft, and you have described its performance objectives, one of the subsystems is the engine. Is there an available engine, or will new technology be required to satisfy the stated performance specifications? Are the activities to be simply modifications of existing equipment, or do they involve research and development of new equipment?
As activities are identified, the planner must begin to program resources for accomplishment of those activities. At this stage make-or-buy decisions enter the process, as availability of skills and technology in-house are traded off against the costs of contracting out the effort. Budget estimates are built and personnel requirements defined.
A very significant step is the identification of the project control system. What measures and means of communicating information will be most useful in assessing project progress?
Several project documents should be developed to formalize the information generated. The next section will define these documents and present examples.
Elements of Project Planning
In order to define the elements of project planning, it is important to visualize their interrelationships. The three major resources that must be managed for a successful project are time, manpower, and money. The major criteria for success are measured in terms of performance goals, schedule, and cost. If we think of the project as a balancing act it might be visualized as a three legged footstool (Figure 3). Project success should be measured not by achieving stability, but by keeping the surface level, its desired objective.
If the performance requirements are increased, the schedule and the budget must be increased proportionately to keep the project in balance. If one parameter must be kept constant, the other two can be broadened, but not elongated. For example, to increase performance, but maintain schedule, additional resources will have to be applied. The point is that these three factors must be kept in balance or a new measure of project success should be developed. Many projects tighten performance goals, or stretch out time by reducing allocated manpower and don’t adjust the budget so that cost “overruns” are inevitable. In order to keep a project in scope, it is important to use project documents that define and control the different areas.
Work Breakdown Structure (WBS)
Figure 4 illustrates a Work Breakdown Structure (WBS) which is a hierarchically structured listing of the end item, i.e., hardware, software, and/or services, to be generated as a result of project efforts. The first level represents the entire system, whether it be a weapon system, a day-care center, or the transfer of a plant from one location to another. Subsequent levels consist of subsystems, and finally, individual components of the overall system. Some subsystems may be subdivided further than others, so that the final WBS probably will not be symmetrical, but should always sum from lowest level through to highest level.
Figure 5 shows the intersection between the WBS and the organization. The final level defined should be assignable to a single organizational unit. It is at this level that work packages should be developed, and reporting mechanisms structured.
The WBS serves as the basis for cost accounts, work packages, schedules and budgets, and life cycle cost estimates. Once the end products have been defined and the organizational units identified at the lowest level, the next step is the construction of a network of the tasks required to complete the work packages and the interrelationships between them. Whether the best networking approach is a Programmed Evaluation and Review Technique (PERT) type with three estimates or a CPM (Critical Path Method) with a single estimate, a more specialized Graphical Evaluation and Review (GERT), or a Decision-Event-Logic-Time-Activity (DELTA) (5) approach depends on several factors. These include: the magnitude and complexity of the project; the skill and experience level of others preparing it; the length of the project; the type of project (whether R&D or production or services oriented); and the available analytical tools to be used in conjunction with it .(6)
In most projects, networks are used extensively in this stage to assess the impact of varied resource applications, and the use of automated systems in the process can be extremely valuable. In large projects it would be almost impossible to assess the impact of program changes without an automated system and many commercial software packages are available for this purpose. These networks and their associated resource tracking capabilities then become the basis for the control system required throughout the life of the project.
From the networks, tiers of schedules are developed and assigned to the appropriate management level. Again, the number of tiers should be driven to the level at which responsibility for a given schedule is within one organizational unit. This simplifies reporting procedures and assures that higher level schedules, which should be a summation of the levels below them, reflect measurable progress traceable to specific managers, as opposed to subjective evaluations.
Schedules are necessarily interrelated with the application of personnel and money so that the initial time phasing is usually a “straw man” and subsequent iterations establish the project schedule baseline, constrained by the assignment of resources. A preliminary manpower projection should reflect the requirements over the life cycle of the project. Personnel inventories, which identify available resources that can be applied, should be used to match skills and levels required for the project staffing. A project must compete for personnel with other projects within the organization and if it surpasses current capabilities of an organization, must compete in the market place for additional resources. A clear projection of needs over the life of the project allows for better utilization of existing resources and the proper leadtime for training and hiring new people. Many of the project control software packages have manpower-leveling capabilities which allow planners to shift activities not on the critical path to allow optimum use of available personnel. These methods can identify bottlenecks far enough in advance to allow careful evaluating of alternate solutions to the problem.
Budgets are time-phased allocations of financial resources which match the allocation of facilities, equipment, and personnel to the project schedule. There are usually several levels which include short-term or day-today operating budgets; mid-term, or budgets which reflect the current fiscal year; and long-range, which are generally defined for the life of the project. A very short-term project may, of course, require a single budget for its operation.
In a well designed and documented project, the interrelationship and phasing of these elements should occur somewhat like Figure 6. Because planning is an iterative process this cycle occurs continually throughout the life of the project.
Policies and Guidelines
Policies and guidelines are formulated as plans are made, but failure to document them can cause many problems, particularly in a long-term project. Decisions are made throughout the planning process — to complete this segment in-house, to buy that component off the shelf, to schedule this work for the months of July and August -these all have some underlying assumptions that are being acted upon. In order to convey these constraints to those making the day-to-day decisions, they should be documented and communicated to the level required for decision making. The formal vehicle for doing this, the establishment of policies and guidelines and over the life of the project, the issuance of directives.
Change Control Procedures
The establishment of change control procedures is a vital part of the planning stage, since it insures adherence to the original project baseline where possible, and a controlled departure from it where necessary. The responsibility for making decisions should be clearly delineated, and the requisite information made available at the same level. Before implementing the plan developed, the project manager must determine its feasibility in the environment and he must specifically identify the level of uncertainty which exists.
Decision-Making in Project Planning
Decision making as a key component of the management function of directing is significant and critical to project success. A cardinal factor which impacts decision making is the amount of uncertainty which exists in the project environment. This uncertainty variable often leads managers to delay decisions, which is a decision in and of itself. Such inaction in a dynamic and changing environment can lead to problems which can affect project success. Thus, there is a need for project managers to understand uncertainty and how to cope with it in the project environment.
Uncertainty is inversely related to information.(2) The more uncertainty the manager has, the less information, and vice versa. These relationships are illustrated in Figure 7 by use of a continuum.
At one pole is certainty. This condition is characterized by the presence of all necessary information needed for a given decision situation. There is no need for a wrong decision to be made. However, such a condition seldom exists and, therefore, is of limited value to the decisionmaker. At the other end of the spectrum is the condition of general uncertainty. Again this is an extreme situation in that no information is available.
From a pragmatic standpoint any situation other than certainty is an uncertain one — an area of specific uncertainty related to a unique decision making context. Risk is a special case of uncertainty characterized by the availability of specific probabilities related to the outcomes of events, such as the probability of a head when a fair coin is flipped. Thus, it can be seen that the decisionmaker makes decisions in the area of specific uncertainty, which basically is an area of partial information. Decisions are complicated by the inability of the decisionmaker to determine the range of the spectrum that applies to a given decision. He generally will cope with uncertainty by means of information acquisition. Several other methods exist but are not necessarily applicable to this paper.
Uncertainty in the Project
Uncertainty can exist in many forms in the internal and external environments of the project. It is a multidimensional concept. For example, decision-makers deal with business, financial, project, environmental, and other types of uncertainty; however, three basic concerns emerge in this area for the project manager. The individual is concerned with cost, schedule, and performance or technical uncertainty.
In the planning process the various alternative strategies are costed and the decision made to use a given strategy based on low-cost and other quantitative factors. These costs, however, are estimates which may be erroneous. Costs may be affected by inflation, high interest rates, labor strikes, material shortages, and other environmental variables. To avoid overruns cost uncertainty can be reduced by the acquisition of valid and accurate information. Since perfect information is never available, the planner can use sensitivity analyses to determine the degree of error that his project can survive. In doing so he identifies the range of the uncertainty spectrum in which he must operate. If he cannot acquire sufficient information at reasonable cost, he should reassess his total plan.
Networking and schedules deal with the sequence of events and their timing. The development of these time estimates occurs in the same environment of uncertainty as the cost estimates. The project manager is dealing with the future events whose timing can be impacted by any number of factors, such as labor strikes, and supply or equipment non-availability. The project manager deals with time uncertainty by use of the three time estimates for PERT or a similar assessment to identify risks associated with schedule errors.
Decision making in planning also is complicated by multiple constraints arising from the internal and external environments. Internal limitations involve budgetary matters, such as funds to pay personnel and procure supplies, equipment and other resources. Adequate planning will aid in the identification of these limitations and the subsequent tradeoffs between resource categories to insure project success. External variables as mentioned before cannot generally be controlled by the project manager; however, they must be identified so as to possibly be influenced and accommodated. These variables include top management policies, environmental changes stemming from political and legislative actions, the strategies of competitors, and the vagaries of the market place.
Planning provides a nexus between the managerial functions required to activate a project and the elements needed for successful project completion. It is concerned with deciding in advance what, when, how and who will take the necessary actions to accomplish established objectives. This paper has examined the project environment for planning, considered the purposes of planning, focused on the stages of project planning, evaluated the elements and stages of planning and discussed the role of decision making in project planning. Project managers seeking success should master these concepts.
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2. Adams, John R., Stephen E. Barndt, and Martin D. Martin, Managing by Project Management, Dayton, Ohio: Universal Technology Corporation, 1979, pp. 3848, 64-73.
3. Vinson, Donald E. and Donald Sciglimpaglia, The Environment of Industrial Marketing, Columbus, Ohio: Grid, Inc., 1975, pp. 189-202.
4. Stern, Mark E., Market Planning, New York: McGraw-Hill Book Company, 1966, pp. 59-81.
5. Warfield, J. N. and J. D. Hill “Correction to The Delta Chart: A Method for R&D Project Portrayal,’ " IEEE Transactions on Engineering Management, May 1972, pp. 132-139.
6. Gido, Jack, An Introduction to Project Planning, Schenectady, New York: McGraw-Hill Book Company, 1964, p. 69.