How to Layout a Project Management Plan
The Project Plan: What and Why?
A plan is essential to the success of any project. To be honest, most projects fail, even ones with good plans. But a project without a plan is hopeless. The project team is sure to deliver one thing when the customer wants another, or run late, or go over budget. A good project plan can set us up to succeed by avoiding all these problems - and many others, as well.
A project plan sets us up to manage the project. What exactly does that mean? With a plan, we will be able to: Follow the steps in the plan; Coordinate the efforts of a team with many skills; Be flexible to deal with change, including new good ideas and handling problems; And deliver the desired results on time and under budget. As a project manager, my goal is more than customer satisfaction - it's customer delight. And the project management plan is my most important tool.
A good project management plan covers every aspect of a project. According to the Project Management Institute (PMI), there are nine areas we must plan and bring under management to succeed on a project. Walk with me, and I'll show you what they are, and how to lay out a project management plan for your next project.
I've taught over 4,000 project managers, and written four books about project management. You don't need to read them all. In fact, if you follow the steps in this article, you'll be way ahead of most of the professionals I've met!
Table of Contents
- A Complete Plan Pays Off
A project with a plan gets done sooner, at lower cost.
- The Simplest Project Plan: Scope, Time, and Cost
Plan what you will deliver, when you will get it done, and how much it will cost.
- Crucial Elements of a Great Project Plan
Learn how to plan the 6 process (p) factors that ensure project success
- Lay Out Your Next Project Plan
Following the steps in this article, you can lay out your next project plan.
- Use Your Project Plan Every Day
Your plan guides your project - every day!
A Complete Plan Pays Off
When you're done reading this article, you'll know how to create a complete project management plan, covering nine issues that need planning and management.
It sounds like a lot of work - but that's not necessarily true.
I can lay out a plan like this in about 45 minutes for a small project. And, if I do, that project is likely to take 5 hours, instead of 8, and delight the customer, instead of frustrating him. Effectively, I've just doubled my income by laying out a project plan. I'm working smarter - I've reduced frustration and waste.
Of course, a project plan for a big project takes longer. But it always pays off. The time spent in planning ends up saving more time on the project than it takes - every time.
In fact, the savings can be huge. I once was called in to rescue a project with a budget of $10 million. It was already a total disaster - $1.5 million spent, nothing to show for it, and months wasted. The company's stock was going to take a dive if this product came out late, too. I taught the team how to create a project plan, and we laid out the plan together. Less than a month later, we had a new plan that used the best skills of every team member and every consultant, and the new product was scheduled for on-time delivery under the new project plan.
Sure, that plan cost about $10,000 to create. But it saved the company $10 million, and helped the company make about a hundred million dollars in the next few years.
Figure #1: The Iron Triangle
The Simplest Project Plan: Scope, Time, and Cost
The simplest project plan has at least three elements: Scope, Time, and Cost. Or, in plain English:
- Scope: What are we making?
- Time: How long will it take? When will we start, and when will we finish?
- Cost: How much will it cost?
Say a customer hires my team to build them a web site. If I say, "I'll have the web site you want done in two weeks for $1,200," then that is the summary of the scope, time, and cost of the project. But I need to lay out the full plan to make sure that the web site we are building is what the customer wants, and that we can really get it done in two weeks for $1,200.
Scope, Time, and Cost are called the "Iron Triangle," as shown in Figure #1. Why? Because iron doesn't stretch, and, once a triangle has two sides fixed, the other side can't change without breaking the triangle. The Iron Triangle is a way of reminding customers that they can't get more than they paid for. If they agree on a certain scope for a certain time and cost, they can't come back later and say, "I want more." If they do, we show them the Iron Triangle diagram and say, "You can't stretch an iron triangle. If you want more results, we need more time to do the work, and it's going to cost more money, too."
Let's take a closer look at each of these three elements.
Scope: What are we making?
It may seem simple: We're making a web site. But the customer may be assuming that there will be video and sixteen pages and a shopping cart, even though your offer clearly stated that a $1,200 web site had up to five photos, six pages, no video, and no shopping cart. So, to make a scope statement, which is the first section of the project plan, we write down what we will deliver.
And we also write down what we won't deliver. Customers tend to remember you said "yes" to everything they wanted, even when you said, "no." So, let's say the customer asked for video, and you said, "I'll be happy to link in a video if you provide one. But creating a video is not covered within the $1,200 price, and can't be done in two weeks." If that happened in the planning meeting, then be sure it is in the project plan as well, in a section called "exclusions." We can be polite. We don't need to say "LISTEN UP: NO VIDEO." But we can say, "The current $1,200 plan does not include any video production. If you want a video on the site, we can produce a 3-minute video and add it for an additional $350 after the site is up. It will take an additional week to create the video."
Another common mistake in scope statements is whether support is included. A customer may assume that, once the web site is up, you'll make changes and additions for free. Your scope statement should include the support you will provide, and explicitly exclude any support that you won't provide.
A good scope statement lays out all assumptions clearly, so that you can be sure that everyone involved in the project has the same goal in mind. As the project goes forward, you will remind people of the scope statement to keep everyone on the same page. And when you are done, you'll compare your deliverables to your scope statement. You'll deliver everything the client wants, and ensure customer delight!
Time: How long will it take?
It may seem simple to say, "I can build a web site in two weeks." But what does that really mean? Good project time planning and estimation is a lot more than a claim like that. Here are some issues to consider:
- Effort is the total number of hours we and our team will work.
- Duration is the total time the project will take, from start to finish.
- Duration and effort do not have a simple relationship. For example, we might deliver sooner with more people working on the same project at the same time. Or we might need more time waiting for the delivery of information from the customer, or because we are working on several projects at once.
If we are doing a project that is very routine for us and our team, we can estimate time by comparing to a similar past project. But be careful not to make assumptions about the project. Check for differences in scope carefully, as a small difference in scope can make a big difference in time. For example, if all your previous web sites were hosted on one web host, and this client wants you do use a different host, it may take a lot longer.
There are some other time traps, as well. What if the client doesn't deliver the text for the web site at the beginning of the project? What if they don't approve your graphics and pages quickly? This could add to the project's duration. And, unless you communicate very clearly, the client will not know that he or she is the one delaying his or her own project.
Cost: How much will it cost?
The simplest cost plan is time and materials: hours of work multiplied by rate for services, plus the cost of any items you are purchasing for the client. Often, this is enough. But you should also include billing terms, and a statement of how cost overruns will be handled.
When your project plan includes scope, time, and cost, you've got the basics in place. Is the plan done? Far from it! Scope, time, and costs are results of doing good work, not making mistakes, and taking care of problems as soon as they happen. So we need to plan for those process factors, as well.
Figure #2: The Iron Triangle is Supported by 6 Process Factors
Crucial Elements of a Great Project Plan
Planning the iron triangle isn't enough. If we only plan and manage scope, time, and cost, then things will go wrong before we know it. We will fall short, deliver late, or run over budget. In fact, the last time that anyone thought that a project plan laid out with scope, time, and cost was complete was about 50 years ago.
Figure #2 above shows how the Iron Triangle, the three Results (r) factors, depend on six other Process (p) factors. We ensure successful delivery of results on time and within budget by managing all nine factors, the three (r) factors described above, and these six (p) factors, as well:
- Quality: What makes it good?
- Risk: What could go wrong, and what will we do about it?
- Human Resources: Who will do the work, and who will do which job?
- Communications: How will we keep in touch and stay on the same page?
- Procurement: What will we buy, and how will we get it?
- Integration: How will we keep all these nine areas together, and how will we manage change?
Now, you may not need to lay out a plan for each of these nine areas. But you do need to ask if you need to lay out a plan for each area. Any area that needs a plan and doesn't get one is built on guesswork and assumptions. It's about as likely to succeed as an airplane held together with bailing wire and chewing gum. So, here's a quick guide to the six process (p) areas of a well laid out project management plan.
Quality: What makes it good?
Key questions: What are the most crucial parts of the deliverable for the customer? What would delight them? How do we make sure we do a great job on those specific items?
Risk: What could go wrong? And what can we do about it?
The simplest way to create a risk plan is to ask: What went wrong the last five times we did a project like this one? We might get a list like:
- We delivered late because someone got sick.
- The client took three days to deliver the approval for the graphics, and we got them on Friday, and we had to work all weekend to finish.
- The client didn't tell us the password to the site, and we started three days late.
- The client loved the web site, but never paid his bill.
Do any of these sound familiar? Well, make your own list like this one, and then write down how you can prevent the problem, reduce the chances of it happening, or deal with it well if it happens. Here are management solutions for each of these risks:
- Train two people on the team to do every task, or have a consultant on call to fill a gap on the team.
- Educate the client before the project begins, telling them how fast we expect approvals or change requests, and that delay by the client delays the delivery date of the project.
- Make a checklist of everything we need from the client, deliver it to the client, and don't start the project until we have everything in hand.
- Require a down payment. For clients without a proven payment history, require escrow.
A risk plan can be much more complicated than this. In fact, heavy duty project managers plan for risks using statistics! But if you've made a list of risks, and planned how to prevent or handle each one, you're running way above average.
Human Resources: Who's on the team, and what will each person do?
Here, the most important thing is to make sure that we have a team with all the skills needed to do the job. But, on big, complicated projects, Project Human Resources Planning can include things like hiring, retention, overtime, holiday schedules, and union rules.
Communications: How will we keep in touch and stay on the same page?
Most projects get delayed because crucial decisions are not made on time, and work grinds to a halt. There's a scene in the movie Aviator, about Howard Hughes, where he's starting to go crazy, and hundreds of workers are idle, waiting for instructions, while Hughes is trying to decide the right shape for the joystick. Unfortunately, this scene is all too familiar to us project managers, even when no one is going crazy!
I've also seen project fail because different team members were given different versions of the plan. One time, we decided to drop a certain module from a product, and the customer agreed. But no one told the programmer, and he literally stayed up all night trying to make it work. I don't need to tell you how the programmer felt the next morning, when we told him he'd stayed up all night for no reason. Let's just say that communications mistakes like that don't build loyalty! With poor communications, half the team thinks we're making a horse, and the other half thinks were making a donkey. When the project is done, we've got something with the head of a horse and the tail of a donkey, and it makes the project manager look like a horse's rear end!
So, communications is key. And that's even more true these days, when many projects are done by web, email, and phone. Often, we are working with team members who live in different time zones and speak different languages. In these cases, a communications plan is key to success. Simply ask each person when and how to contact him or her, and write down guidelines for meetings, conversation, and approval or change requests.
Procurement: What will we buy, and how will we get it?
Some projects have no procurement needs. If we are not purchasing, renting, or leasing anything, and not retaining the services of a subcontractor, we can skip this section. But if we are doing any of these things, then we need to coordinate contracts, letters of agreement, insurance, adherence to regulations, and so forth with the project plan. That is how we lay out a Project Procurement Plan.
In laying out a project plan, integration has two meanings. The first is this: We need to make sure that all the parts of the plan tie together. Suppose the customer asks for additional pages on the web site, and we agree. Then we add ten hours of work. But did we update the cost to reflect the changes in scope and time? What if those 10 hours count as overtime, and according to Human Resources rules, we have to pay time-and-a-half? All nine areas tie together, and, when we lay out the project plan, we have to cross-check everything.
Even if we cross-check everything, that is not enough. Projects change in the middle, to. So the second part of integration comes after planning - it's managing change control during the project to keep everything on track.
Lay Out Your Next Project Plan
Following the steps in this article, you can lay out your next project plan. If you've planned a project before, you can probably make this one much better, just by being sure to pay attention to the nine areas.
The Project Management Institute calls these nine areas of knowledge in project management. But I encourage you to keep it simple. Common sense is much more important in project management than knowledge is. Take the time to think things through in terms of these nine areas that will need management, and what you come up with will be great.
Of course, some project plans are much easier than others. The uniqueness of the project is a key factor: The more routine a project is, the easier it is to plan. And of course, the size, complexity, and pressure to reduce cost or deliver quickly all make demands on planning, as well. If you need more help, you might take a look at my book Project Management Made Easy, or check out resources available from PMI.
Use Your Project Plan Every Day
The biggest reason for project failure is the lack of a good plan. Congratulations! You're past that problem. Now, you're ready to make the second biggest mistake, which is to throw the plan in the drawer, get to work, and not make good use of the work you've done.
When you are driving somewhere you've never been before, do you set the GPS in your car, then ignore it, and just drive until you're completely lost. Of course not!
Yet that's what too many project managers to. Using your project plan every day and every week is like listening to your GPS. Each day, let your plan tell you:
- What to do today
- What to do next
- What to tell your team to do
- When to contact your customer, and what to say
- What risks to watch out for, and prevent or manage
Each week, check the work you've completed against your plan and solve any problems that come up. If you just track time and cost against results, you'll just discover that you are late and over-budget. But if you keep an eye on the six process factors as well, you'll catch problems before they blow your budget, create big delays, and deep-six your project. With a good plan laid out, you're on your way to success.
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