Plan the Activities, Schedule, and Cost

Learning Objectives

After completing this unit, you will be able to:  

• Create a work breakdown structure.
  
• Develop a project schedule.
  

Plan for Success

Picture this. You are a project manager in a large hospital. A new CEO was recently appointed. Today, they announced the organization is undertaking a major project: an automated bed management system designed to optimize bed use and, in turn, increase savings and profit. The CEO declares the project will begin next week, end in just a few weeks, and cost exactly $100,000.00.

No one was consulted on this decision, and these project parameters seem to have randomly come down from the sky. Unfortunately, scenarios like this are common. From a project management standpoint, projects with fixed time and costs are very problematic, and they are more likely to fail. Why? Simply put, imposing a deadline and budget before understanding the scope is a mistake.

You have been assigned as the project manager for this initiative and have been directed to get started. What do you do? You put your project management skills to work, and start planning to set the right expectations. Walden University lets us know how.

Break It Down

Scoping out the project is the first step in project planning. The scope encompasses all the work that must be done to deliver the expected outcome. You develop the scope using the requirements provided by the sponsor and key stakeholders. 

You capture the scope in a common tool called a work breakdown structure (WBS). The WBS identifies the activities that must be completed to produce the final deliverable and any associated subdeliverables. With the WBS, you can plan the schedule and cost.

Let’s assume that the scope of this project has been defined and a WBS has been developed and provided to the project team.

What can we learn from the WBS? 

• The bed management system is the expected final deliverable of the project.
  
• System technology is a subdeliverable of the bed management system.
  
• There are two subdeliverables associated with the system technology—application software and the system hardware.
  
• Four activities each have been defined and must be completed in order to deliver the application software and system hardware.
  

You’re one step closer to setting the right expectation with the CEO.

How Long Will It Take?

For the sake of simplicity let’s look at just one component of the project: bed management application software. You estimate the duration of each of the activities defined in the WBS. Estimating activity durations is one of the more technical aspects of a project manager’s job.

To begin, people must be assigned to the activities. What level of expertise is needed to perform the activities? Does your organization have people with the needed level of expertise? Are they available when needed? These are just some of the questions that must be answered in order to accurately determine how long it will take to complete the project.

A Gantt chart is the tool most often used to develop a project schedule. It can be displayed in outline form like the one here or as a bar chart. The bar chart view is particularly helpful for communicating with executives who may not want to see the detail but want to get a sense of the timeline.

Let’s see what the Gantt chart can tell us about this component of the project.

You have a list of the activities, assigned people, and estimated durations for each activity. You’ve identified the predecessors (those are explained shortly). Bravo! You have a complete schedule for the delivery of the bed management application software.

What are some key takeaways? 

• The duration of the application software component of the project is 21 days.
  If it starts on June 1, it will finish on July 5. Wait, isn’t that more like 30 days? No. Weekends and holidays are not counted.
  
• The total duration is 21 days.
  How did you get to that calculation? Not all of the activities can be started at the same time. Some activities require a predecessor, an activity that must be completed first. A good example is that you can’t evaluate the responses to the RFQ before it's sent out. Predecessors can become very complex—a project team must understand how activities should be sequenced and apply the appropriate predecessors to get an accurate schedule.
  

You have the activities and the schedules. Let’s now talk dollars and cents. 

How Much Will It Cost?

The activities help you identify the components you need to purchase (software and hardware for the bed management system), and the schedule helps you identify who needs to work on this project with you, so you can now break down their rates. It’s time to add it all up, right?

Of course it sounds simple, but simple doesn’t mean easy. The rate for the people’s work can be determined in many ways and it really depends on the organization. As the project manager, you may need to work with the hospital’s human resources team or operations team to find the right rate. And despite your research, the request for quote phase may reveal that your estimate for the hardware and software need to be adjusted.

These are all risks that you should anticipate and make your stakeholders, including the CEO, aware of before embarking on the project. Walden University talks about risks in the next unit.