Fundamental Definitions in a Project-Oriented Environment

To ensure a common understanding of project management tools, this chapter will define some basic project-oriented terms and will discuss four of project management's most important tools: the work breakdown structure (WBS), the Gantt chart, network diagramming, and earned value. These important tools are the foundations of project management regardless of the type project.

Project and Project Management

A project is usually a onetime activity with a well-defined set of desired end results. It is this onetime characteristic that differentiates project activities from functional activities. For example, individuals in a functional department, such as human resources, may have specific projects assigned to them, but their usual responsibilities are recurring. A project is defined as a unique, temporary effort to produce specific deliverables measured against customer-specified performance criteria.

Project Uniqueness

Every project is unique. No two projects are alike, regardless of how routine they are to the organization. Each one is characterized by some degree of customization. Even if two projects were exactly alike technically, differences would be noticeable because the four parties at interest, or stakeholders (i.e., client or customer, parent organization, project team, and the public), define success or failure in different ways. In addition, the stakeholder group is usually different for each project.

Temporary Duration

In the context of project duration, the term "temporary" is dependent on the industry or one's perception of time. For example, in the construction industry, a house might be built in six months, while a hospital might take two years to build. In the aerospace industry, a new aircraft development effort can take ten or more years. So temporary doesn't mean short-term as we generally use it, but rather it means that there are definite beginning and end points to the effort.

Customer-Specified Performance Criteria

The customer, whether internal or external, defines the level of performance required for the project deliverables. The customer or client defines these performance criteria in terms of requirements. It is the responsibility of the project manager to interpret the requirements and to obtain agreement from the customer that the interpretation accurately reflects the customer's needs. It is also the responsibility of the project manager to identify or develop standards against which to measure whether these requirements are met.

In some instances, industry standards can be used to measure performance criteria. For example, electrical codes exist for those projects requiring electrical wiring or power connections. Sometimes standards are a part of the performance criteria. For instance, a requirement of mean-time-between-failure (MTBF) of some number of hours can also serve as a standard. This is because MTBF is a quantifiable measure and can be identified with average acceptable values for similar systems. When standards are not available, the project manager is responsible for providing a way to determine whether the product is acceptable to the customer. One way might be to use an independent quality assurance group. Another way might be to write a standard or to use another company's product as a benchmark. The key to success in identifying, interpreting, and measuring customer requirements is to obtain customer input and agreement about your interpretation of these requirements and about how your performance will be measured.