Start up Project Suggested Table of Contents 1. Objective of the company 2. Mission and vision 3. Executive summary 4. Project description (Overview, Project Scope Statement, WBS) 5. Project requirements 6. Approach and phasing strategy 7. Assumptions and constraints 8. Critical success factors 9. Project completion criteria It is important to note that a project plan is typically not developed in a single effort. Rather, the components of the plan are developed at different stages of the project planning and portfolio management process. For example, the project description, preliminary project justification, and preliminary risk management plan are generally prepared as part of project initiation, whereas the complete project justification and risk management plan are usually prepared after the project has been selected. The detailed project schedule and the detailed time and cash management plan are prepared toward the end of the planning process and incorporate the material from the previous plan components, especially the risk management plan. 3.2.1 Executive Summary The executive summary should tell the organizations principals everything they need to know (at a high level). The executive summary is the elevator pitch that explains, justifies, and motivates the project in one or two paragraphs. Executive summary Documentation that explains, justifies, and motivates the project in one or two paragraphs; elevator pitch. So what should be in the executive summary? Stated as briefly as possible, the following should be included: Project purpose Anticipated benefits Expected costs Critical success factors Significant risks A good guiding principle for the length of each of these items is that it should not exceed two to three sentences. Remember, an executive summary provides the minimum necessary information to give an executive or a steering committee a fundamental understanding of the project. We will provide considerably more detail in the remainder of the project plan. 3.2.1.1 Project Purpose The project objectives statement should briefly describe the purpose of the project. For example, This project implements the core data management, inventory control, forecasting, and replenishment systems for the new ABC Supply Chain Management product. These modules are the necessary foundation on which all functional modules such as automated replenishment and load scheduling are built. This statement is concise and offers a clear understanding of what the project will do and why it is important. It does not convey all of the nuances of the projects objectives, but it does convey the essence. An executive wishing to know more can turn to a subsequent section in the project plan where the purpose is covered in detail. 3.2.1.2 Anticipated Benefits As with the project purpose, the discussion of anticipated benefits in the executive summary should be brief. Remember that all benefits of a new project represent marginal cash flows only, as discussed in Chapter 2. A complete description of all the projects benefits, with full justification, is provided later in the plan. The following is a good example of a benefits statement in an executive summary: Anticipated benefits of the system include a 3% increase in sales, 25% reduction in inventory investment, and reducing shrink from 4% to 1.5% of sales. The annual dollar contribution after roll-out to all stores is expected to be $100 million. Full attainment of benefits is expected by the beginning of Year 3. The planned value of the project from this statement is very clear. If there is any question about the validity of the estimate, an executive will head straight for the justification section of the project plan. 3.2.1.3 Expected Costs The expected cost statement should help executives understand both the magnitude and the timing of the investment. Again, a brief statement is best for communicating the essential information, as the detailed cost estimate support will be contained in a subsequent section of the plan. The following illustrates a brief expected cost statement: We estimate the total cost for the project at $4 million. Costs to launch the project (development software, equipment, leased office space) are estimated at $800,000. The first year run rate will average $100,000 per month. The second year run rate, including roll-out costs, is expected to average $167,000 monthly. This statement allows executives not only to understand total cost but also to gain a sense of how the project must be funded during its lifetime. This is an important consideration for ensuring project funding as the needs of the project must be balanced against those of ongoing operations as well as other projects. The statements of benefits and costs should be appropriately specific so the expected net present value E(NPV) can be calculated, as discussed in Chapter 2. 3.2.1.4 Critical Success Factors Critical success factors (CSFs) are those things that must go well to ensure success for an organization.1 In the context of project management, these should be considered the necessary conditions, exogenous to the project or program, that must be satisfied for the project to have a high likelihood of success. Note the emphasis is on factors that will require special attention to achieve good performance. Here is an example of a CSF that might be included in an executive summary: Completing the acquisition of the ABC product from XYZ company by July 1, 20XX, is a critical success factor for completing this project on the proposed timeline and budget. Critical success factors (CSFs) The necessary conditions that must be satisfied for the project to succeed. Note this particular CSF bears much further discussion. What will be the impact on time and budget if the acquisition is not completed by the indicated date? What if the acquisition cannot be completed at all? These questions, and the answers to them, must be addressed in the Critical Success Factors and Risk Management Plan sections of the project plan. In the executive summary, it is sufficient to highlight the necessity to complete the acquisition. 3.2.1.5 Significant Risks A unifying premise of this text is that successfully managing a project requires explicitly identifying and managing possible conditions and events that may cause a project to deviate from its project plan (i.e., identifying and managing the projects risks). As we discussed in Chapter 1, we want to identify those events that have a large risk exposurethat is, they have a significant probability of occurringand those events that could have a significant impact on project outcome. Keeping with the CSF example, we might identify the following risk that could result in a significant delay and cost increase: Successfully integrating the ABC product postacquisition represents a significant risk for this project. If our preliminary estimates of the data model integration effort are incorrect, then modifying the data architecture could add as much as $3 million to the cost of this project and extend the time by as many as 16 months. The expected impact of this situation is estimated at $1.2 million and 6 months. Clearly, this issue warrants more discussion in the risk management plan. Here, however, it is sufficient to apprise executives that this single risk could nearly double the projects cost and extend delivery by nearly 50%. 3.2.2 Project Description A good project description will provide the reader with the details needed to completely understand the project at a high level. Typically, the project description should include the following: Overview Background and project history Scope Objectives Project description A detailed description of a project that conveys the reasons for undertaking and the anticipated benefits associated with completing a project. The primary goal of the project description is to help stakeholders (e.g., sponsors, new team members, coworkers outside the project team) share a common view of the project with the project team. As such, the description plays an important role in a successful project organization. By establishing a common context for the project, the project description plays a role in reducing the risk that different stakeholders view the project with different expectations. 3.2.2.1 Overview The project overview conveys the what and where of the project. The who, why, and how are addressed by other parts of the project plan. The project overview establishes a consensus and common expectations within an organization on what, exactly, is to be done. Heres an example of a project description: The goal of the SCORE (Supply Chain Optimization Re-Engineering) project is to implement the infrastructure that will allow us to meet our supply chain demands for the next 10 years. The project will provide completely new, enterprise-wide data and communications architectures for our supply chain management systems including the following: Customer order management Warehousing, distribution, and logistics management Procurement and inventory management Supply chain coordination, including supplier selection and performance measurement Promotion planning and logistics management The SCORE project is designed to provide the company with a competitive operating advantage relative to our current competition. Competitive advantages resulting from technology solutions are generally assumed to accrue for a limited duration (e.g., 23 years). However, the SCORE project, at its heart, is a business reengineering project that will fundamentally improve the companys supply chain operations. Benefits resulting from the project include inventory reductions, increased sales, significantly reduced shrink, and improved support for omni-channel retail operations. In addition to streamlining and improving our supply chain management processes, the SCORE project will implement new optimization technology in supply chain planning, replenishment and procurement, transportation and shipping, and consumer targeted marketing (both online and in-store). The SCORE project will also decentralize supply chain operational systems. This aspect of the project is critical to reducing the companys critical single points of failure. At present, all of our operational system support is provided by a centralized system hosted at the companys central data center. While we have a disaster recovery plan in place, which would minimize the amount of downtime resulting from a disruption at the data centers location, distributing the operational support systems will allow us to avoid any supply chain outages resulting from a data center disruption. While the operational systems will be distributed, the SCORE project will also implement the infrastructure necessary for us to maintain a real-time centralized view of companywide operations. Project overview A high-level description of a projects background, objectives, and anticipated benefits. This description tells a great deal about the SCORE project. After reading the description, a stakeholder will understand that the project will replace information systems critical to the companys operations. More important, these new systems will implement enhanced abilities and performance improvements. Additionally, the systems will provide real support for omni-channel operations. Finally, the description indicates that, geographically speaking, this is a very ambitious project as it will replace systems at the central data center as well as implementing distributed systems for each of the companys supply chain operations centers. 3.2.2.2 Background and Project History A discussion of a projects history is an essential component of a project description, especially for larger projects where team members join and exit the project, and where there may be multiple project managers and sponsors over the course of a projects life. A description of the projects history will help motivate the need for the project and orient new members as they join the project team at various points of the projects life cycle. The project history should concentrate on background that is immediately relevant for the project, and it should avoid excessive use of technical or specialized industry jargon. The project history section is a dynamic component of the project plan and plays an important role in postproject evaluation; an updated project history provides context for the project postmortem. To be meaningful throughout the project, the history must be updated at each major juncture. The kinds of events that should be included in the project history include the following: Significant scope changes (well discuss more about project scope shortly) Significant personnel changes (e.g., change in project management, significant changes to project team composition) Significant environment changes Significant organizational restructuring (including senior management changes) Major competitors entering or exiting the market Realized (risk) trigger events and the resulting outcomes