:AACE CERTIFICATION 2009-2010:

Project Scope Definition

In this week blog, I would like to make a comparison between Project Scope Development in the book theory and business process at PT Inco Project Engineering to develop what we called Project Scope Definition (PSD) for capital project.

PT Inco Project Engineering
At PT Inco Project Engineering, Project scope definition is establish through Project Scope Definition meeting which is setup after annual capital plan approved by the corporate and initiate by the Project Manager assigned on that particular project as per process flow diagram below.

Figure 1: PT Inco Project Scope Definition Process Flow1

The Project Scope Definition attendance is the Project Manager, Project Engineer, Project Sponsor on behalf of Project Owner, Operating & Maintenance Representative and other external resources as required. The meeting deliverable is a meeting document called ‘Project Scope Definition Minutes’ and the purpose of the document are to establish a uniform process for the preparation of a project scope capital project. The document is actually a letter of agreement between Project Manager and Project Sponsor/Owner about the project requirements2.

Project scope definition input is generally coming from project business case generated by project sponsor/owner, project basis i.e. fund, objectives, alternatives, production plan, financial evaluation and historical information.

The project scope definition define project leadership team, project objectives, project requirements include process and what action that will taken, financial statement, preliminary schedule, major equipments, boundary limits, special requirements i.e Environmental, Safety & Health, Government regulation, deliverables expected from the project. All of those aspects are discussed and agreed in the meeting as to what project shall be executed. However, this document not mentioned about the execution strategy for how the work will be implemented. The primary output for Project Scope Definition is for the project team to be able to define Work Breakdown Structure (WBS) and detail cost estimate. The end product is the project documentation through Capital Appropriation Request (CAR) where this document has 2 primary objectives: (1) For the executive to review and approved all the project scopes and deliverables align with corporate strategy as the project plan and (2) Project Charter.

Total Cost Management Framework
Total Cost Management Framework combining the project scope and execution strategy development into one package of process development. The project scope and execution strategy development process translate the project implementation basis i.e. scope, objectives, constraint and assumption into controllable project scope definition and execution strategy. The project scope defines what the work is i.e. the work must be performed to deliver a product, services or result with specific features and function. The execution strategy establishes criteria for how the work will be implemented i.e. general approach through which the work will be performed3.

Process map for project scope and execution strategy development in Total Cost Management Framework is illustrated on the following figures.

Figure 2. Process Map for Project Scope and Execution Strategy Development4

Input to the project scope and execution strategy primarily project implementation basis include scope, objectives, constraint, assumption, authorizing fund and resources. The other inputs are the alternatives, change information, historical information and planning process plan. All of those inputs are executed through the project scope tools & techniques starting from plan scope and execution and breakdown scope.

The primary outputs of the project scope and execution strategy are the Work Breakdown Structure Development, Work Package, Organization Breakdown Structure and Execution Strategy and at the end is the documentation.

In general, project scope definition at PT Inco Project organization is very much similar with the project scope definition theory in the Total Cost Management Framework. There are some discrepancy but they are mostly due to differentiation on the definition but the main objectives are the same.

The main difference is only in the execution strategy of the project. The execution strategy is part of project scope development according to the Total Cost Management Framework meanwhile at PT Inco Project business process, the execution strategy is determined after CAR approval by the executive through Engineering Work Package (EWP). I think that I have to agree with TCF process that the execution strategy shall be developed upfront prior CAR approval. Execution strategy development after plan approved will have a very high risk on the accuracy of the cost and schedule and this case mostly happen in the capital project that we manage in the past.

I’ll then review again the current business process then do some changes into the project scope definition documents to include execution strategy into the project scope development stage.

Sorowako, November 19th, 2009

1 PT Inco Engineering, Business Process Flow Inception Phase chapter 5.1.1.3 page 2 or 15 Author by Muhammad Asril

2 PT Inco Engineering, Standard Operating Procedure for Project Scope Definiton, SOP #SES-ES-N-005.1 Page 4 of 22 Author by Gustaf Ganna Songgo

3 Total Cost Management Framework Chapter 7.1 Project Scope and Execution Strategy Development page 123