Defining Project Scope

If a project’s client cannot ask for what it needs, the project team is highly unlikely to deliver what’s wanted!  A key element in effective project stakeholder management has to be asking enough questions to ensure everyone understands what the project is to deliver.

On Thursday 20th November 2008, I was privileged to attend the launch of a new report,  ‘Scope for Improvement 2008’, focusing on the issues of scope definition in major Australian construction projects. The total value of projects surveyed was approximately AU$60 billion with an average project value of AU$360 million.

The 2008 survey has shown a slight deterioration from the initial 2006 survey, in the overall performance of the industry in developing adequate project scoping documents. The 2008 findings also show inadequate scope specification is now an endemic problem in Australia with a growing trail of budget blowouts, delays and disputes.

The worry is the construction and engineering industries are generally seen as being far more mature in their project management practices then most other sectors of the project management industry and Australia has one of the more advanced industries world-wide. The key findings from the report, outlined below, are a salient lesson for anyone involved in defining the scope for a project:

Key Findings and Recommendations of the report:

The present situation:

• There is a high prevalence of deficient scoping in Australian construction and infrastructure projects with over 50% of projects being inadequately scoped prior to going to market.
• Scoping inadequacies are being discovered far too late with 64% of deficiencies only being discovered during execution.
• The consequences of poor scoping are significant: 61% of project experienced cost overruns, 58% delays and 30% contractual disputes.

The main factors contributing to poor scoping:

• Lack of experienced and sufficiently competent personnel with 83% of projects reporting adverse effects. This is to an extent explainable by the construction boom of the last few years but compensating factors such as increased time and/or contingencies do not seem to have been allowed.
• Insufficient time to prepare the scope documents.
• Inadequate definition of project objectives by the principal resulting in subsequent changes to the scope and corrections to the scope documents.
• Lack of consultation with end users, insufficient clarity of objectives and a lack of understanding of why the project is required and the benefits the project will produce.
• Insufficient research to understand the environment the project will be executed within.

Practical steps for successful scoping:

• Industry needs to think and act differently.
• Clearly identify project objectives.
• Identify and bring together all relevant stakeholders and end users for the project and maintain their involvement in the scope definition process.
• Set realistic timeframes and budgets for developing the scope requirements (and the overall project).
• Interface the proposed project with related projects and existing infrastructure.
• Identify and establish a core project team early.
• Empower a project leader with appropriate and clear authority and accountability.
• Clearly describe the project objective and requirements once identified.
• Choose the right approach for scope description (performance criteria, detailed specification, etc) and choose the right contract delivery model that aligns with the scope – risk needs to be properly apportioned.
• Check the overall contract package for consistency.
• Involve the tenderers / project management team in getting the scope documents right.
• Capture the value from a successful bid in the final contract.
• Resolve scoping issues and disputes under a contract.

The research was conducted by partners at Blake Dawson with support from the Australian Constructors Association and Infrastructure Partnerships Australia. A full copy of the report can be downloaded from http://www.mosaicprojects.com.au/Resources.html#Construction