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By Peter R. Dumont,1 Member, ASCE, G. Edward Gibson Jr.,2 Member, ASCE, and John R. FIsh3
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ABSTRACT: It is widely accepted that poor scope definition is one of the leading causes of
project failure in the U.S. construction industry. Many owner and contractor companies un-
derstand this, however, they share the misconception that it is not economically feasible to
spend the time or money necessary to adequately define the scope of work early in a project's
life cycle. In other cases project participants are ignorant about the requirements for an ade-
quately defined scope of work. A tool called the project definition rating index (PORI) was
created to address these problems. The PORI is an easy-to-use, weighted checklist of 70 scope
definition elements allowing the user to measure and manage the level of scope definition as
project planning progresses. Results from 40 pilot projects will be presented showing that a
specific PORI point threshold provides some measure of confidence in project outcome. The
implications of this tool in the project scope management process will be explored. Conclu-
sions and recommendations about the PORI will be made for project management profes-
sionals.
followed by an explanation of how today's rapidly savings of this magnitude can have a significant impact
changing business environment, which has placed in- on a venture's outcome. Oue to its importance, preparing
creasingly rigorous pressures on project teams, further a scope definition package should receive a level of man-
reinforces the need in the U.S. construction industry for agement attention commensurate with its potential for
a tool like the PORI. Finally, this paper will conclude impacting project performance. The PORI provides
by describing how the PORI provides a structured ap- project team members with a structured approach for
proach to the project scope management process, thus developing a quality scope definition package.
facilitating better scope definition.
DESCRIPTION OF PORI
BACKGROUND
Most experienced industry participants recognize the
Project scope definition is the process by which importance of scope definition during preproject plan-
projects are defined and prepared for execution. The in- ning and its potential impact on project success. Until
formation identified during this process is usually pre- now, however, the industry has been lacking a practical,
sented in the form of a project scope definition package. nonproprietary method for determining the degree of
A scope definition package is a detailed formulation of scope development on a project. The PORI is the first
a continuous and systematic strategy to be used during publicly available tool of its kind. It allows a project
the execution phase of a project to accomplish the proj- planning team to quantify, rate, and assess the level of
ect objectives and fulfill the driving business need. This scope definition on industrial construction projects prior
package should include sufficient supplemental infor- to authorization for detailed design or construction. A
mation to permit effective and efficient detailed engi- significant feature of the PDRI is that it can be utilized
neering to proceed (Gibson et aI. 1995b). to fit the needs of almost any individual project, small
Success during the detailed design, construction, and or large. Elements that are not applicable to a specific
start-up phases of a project is highly dependent upon the project can be zeroed out, thus eliminating them from
completeness of the scope definition. Some construction the final scoring calculation.
industry officials consider lack of scope definition to be The PDRI consists of 70 elements in a weighted
the most serious problem on construction projects (Smith checklist format. The 70 elements are divided into three
and Tucker 1983). A poorly defined project can experi- main sections and 15 categories. A complete list of the
ence considerable changes that may result in cost over- sections, categories, and elements are given in Fig. I. In
runs and a greater potential for disputes. Inadequate addition, all elements are described in a detailed glos-
scope definition can lead to changes that may delay the sary, including required level of effort and checklists
project schedule, cause rework, disrupt project rhythm, (Gibson and Dumont I996b). This is significant because
and lower the productivity and morale of the workforce. it provides industry with a common and definitive un-
Previous research has shown that increased levels of derstanding of what constitutes complete definition of
scope definition during the early planning, or preproject each element.
planning, phase of a project can greatly improve the ac- The PDRI has been proven beneficial as a
curacy of cost and schedule estimates as well as the
probability of meeting or exceeding project objectives • Checklist that a project team can use for determin-
(Pre-Project 1995; Griffith and Gibson 1995; Hackney ing the necessary steps to follow in defining the
1992; Hamilton and Gibson 1996; Merrow 1988; Mer- project's scope
row et al. 1981). Specifically, research by CII investi- • Listing of standardized scope definition terminol-
gated the importance of preproject planning on capital ogy for use throughout the construction industry
projects and its influence on project success. This re- • Industry standard for rating the completeness of the
search concluded that higher levels of preproject plan- project scope definition to facilitate risk assess-
ning effort can result in significant cost and schedule ment, prediction of escalation, evaluation of poten-
savings. In particular this research effort studied 53 cap- tial for disputes, etc.
ital facility projects, 17 of which had been executed with • Means to monitor progress at various stages during
a high level of preproject planning effort, 18 with a me- the preproject planning effort
JOURNAL OF MANAGEMENT IN ENGINEERING / SEPTEMBER/OCTOBER 1997/55
FIG. 1. Project Definition Rating Index (PORI) Sections, Categories, and Elements
• Tool that aids in communication between owners the performance of past projects, both within their
and design contractors by highlighting poorly de- company and externally, in order to predict the
fined areas in a scope definition package probability of success on future projects
• Means for project team participants to reconcile
differences using a common basis for project eval-
uation HOW PORI WAS DEVELOPED
• Training tool for companies and individuals
throughout the industry The elI research team that developed the PDRI was
• Benchmarking tool for companies to use in eval- formed in 1994 to produce effective, simple, and easy-
uating the completeness of scope definition versus to-use scope definition tools so that owners and contrac-
561 JOURNAL OF MANAGEMENT IN ENGINEERING 1 SEPTEMBER/OCTOBER 1997
began by examining past research in project scope de- of definition. Each score sheet then was normalized to
velopment. J. W. Hackney (1992) pioneered one of the 1,000 points and averaged. Statistical tests were per-
first attempts to quantify and define the specific elements formed looking at standard deviation, skewness, and kur-
required for proper scope definition. Although his work tosis of the individual elements, and adjustments were
is excellent it has not been widely accepted, perhaps due made. This input was used to determine the individual
to its complexity. Apart from Hackney's work, however, element weights. These weights comprise the PORI
the research team found the industry lacking in a non- score sheet that can be found in a separate document
proprietary method for benchmarking the level of pre- entitled PDRI:Project Definition Rating Index, Industrial
project planning effort or the degree of scope develop- Projects (Gibson and Oumont 1996b). Additional infor-
ment on a project. From these findings the research team mation on this research methodology can be found in
realized that its primary challenge was to develop a sim- Gibson and Oumont (l996a).
ple and easy-to-use tool for project scope development. The weighted PORI score sheet is used to evaluate the
This tool must identify and precisely define each critical level of completeness of the project scope definition.
element in a scope definition package and allow a project Each of the 70 elements is subjectively evaluated by key
team to quickly predict factors impacting project risk. project stakeholders based on its level of definition ver-
To develop a detailed list of the required elements sus its corresponding description. Summing the individ-
within a good scope definition package the research team ual element evaluations and their corresponding weights
utilized four primary sources: the expertise of the re- leads to a single PORI score for the project, which can
search team, an extensive literature review, documenta- range from zero to 1,000. The lower the total score, the
tion from a variety of owner and contractor companies, more well defined the project. Higher weights signify
and a separate workshop of project managers and esti- that certain elements within the score sheet lack adequate
mators. Initial topic categories were obtained from Hack- definition and should be reexamined prior to project au-
ney, previous ell work, and through using the team's thorization.
internal expertise. This preliminary list was expanded
using scope development documentation and best prac- Validating PDRI
tices from 14 owner and contractor companies. Through Although the PORI weights were based upon the ex-
affinity diagramming and nominal group techniques, the pertise of 54 experienced project managers and estima-
list was further refined and agreement reached regarding tors, the document is opinion based and, therefore, was
exact terms and nomenclature of element descriptions. tested on actual projects to verify its viability as a tool.
Once this was completed a focus group of six individuals Forty validation projects ranging in authorized sizes
representing one owner and three engineering/construc- from $1,000,000 to $635,000,000 were scored with the
tion companies who had not seen the approach previ- PORI. Together these projects represent greater than $3.3
ously was held to "fine tune" the list of elements and billion in authorized cost. The types of projects included
their descriptions. This list, which forms the basis fo the chemical, petrochemical, refining, gas production, power
PORI, was presented earlier in Fig. 1. Oue to the need plants, and manufacturing facilities. Each was con-
for brevity the detailed element descriptions are not in- structed between 1988 and 1995. A PORI score was
cluded in this document. computed for each project based upon the level of def-
inition at project authorization prior to detailed design
Element Weighting and construction. (Note that all of these projects were
The research team hypothesized that all elements were scored "after the fact.")
not equally important with respect to their potential im- A success rating based upon cost performance, sched-
pact on overall project success. Therefore, each element ule performance, percentage design capacity attained at
needed to be weighted relative to the others. Higher six months, and plant utilization attained at six months
weights were to be assigned to those elements whose also was computed for each project. This success rating
lack of definition could have the most seriously negative had been used in previous research regarding preproject
effect on project performance. planning (Hamilton and Gibson 1996).
To develop credible weights the research team invited A statistical analysis revealed that the PORI score and
54 experienced project managers and estimators from 31 project success variables were linearly rated with a co-
JOURNAL OF MANAGEMENT IN ENGINEERING / SEPTEMBER/OCTOBER 1997/57
efficient of determination (R 2 ) of 0.39 between the two tors. Contractor-led project definition is prevalent on
(Pre-Project Planning Tools: PDRI and Alignment, in roughly one-third of all projects today, whereas 20 years
press, 1997). A low PDRI score represents a project def- ago, it rarely occurred (Merrow and Yarossi 1994). How-
inition package that is well defined and, in general, cor- ever, contractors often are not capable of taking on the
responds to an increased probability for project success. responsibility of effectively leading the definition phase
Based on the analysis of the validation projects, the of a project. This often results in projects with poor cost,
research team found that a trend existed between low schedule, or operational performance. It is apparent that
PDRI scores and high project success levels. Table 1 contractors could benefit from a tool such as the PDRI
shows the difference in subgroup means between that would provide a detailed checklist for determining
projects that scored less than 200 (out of 1,000 total the necessary steps to follow in defining a project scope
points) and those that scored greater than 200. (For ex- as well as a means to evaluate their performance peri-
ample, a cost performance of "-5%" indicates that the odically throughout the process.
mean of final project cost for the 20 projects scoring 200
and below was 5% less than the cost estimate at author- Multiple Small Projects
ization.) The 200 point cutoff was used because it was The age of the megaproject has probably passed.
a logical break in the data set and also corresponded to Many of the companies surveyed by the CII research
projects that met most of their authorization objectives. team while developing the PDRI indicated that they are
Note the significant 19% difference in cost perfor- allocating more of their capital funds towards the con-
mance and the 13% difference in schedule. The sample struction of multiple small projects. As one project man-
set of validation projects is relatively small, however the ager commented, "I have 50 small projects for every
magnitude of these numbers confirms the conclusion that large project. The PDRI is a great tool for large projects,
better scope definition can correlate to savings in terms but small project management is where I really need
of both time and money. Although not shown the stan- help." The answer is, the PDRI is well suited for small
dard deviations for the "less than 200" group were projects also. In just a short amount of time (approxi-
much smaller as well, indicating less variation. mately two hours or less) a PDRI evaluation of a project
The PDRI alone will not ensure successful projects can highlight the most important elements that must be
but, if combined with sound business planning, team addressed before project execution is authorized (Gibson
alignment, and good project execution, it can greatly im- et al. 1995a). Identifying the critical few elements that
prove the probability of meeting or exceeding project can directly impact performance is paramount on small
objectives. projects. Currently several owners and contractor com-
panies are successfully pursuing unique methods of scal-
PORI AND RECENT INDUSTRY TRENDS
ing down the PDRI for use on small or discipline-spe-
Reduced Cycle Times cific projects.
In today's rapidly changing business environment it is
becoming increasingly important for companies to re- INTEGRATING PORI WITHIN PROJECT SCOPE
duce project cycle times in order to get products to the MANAGEMENT
market sooner. Although it is not the ideal situation,
owners often feel that market demand or other pressures The PDRI can significantly improve execution of the
warrant authorization of projects with underdeveloped project scope management phase of the project life cy-
definition. Pushing a project into the field prematurely cle. This phase is shown pictorially in Fig. 2 as devel-
can adversely affect the accuracy of cost and schedule oped by the Project Management Institute (PMI). The
estimates. However, if owners decide to proceed with PDRI can be integrated easily into this phase as a tool
projects that have poorly defined scopes, the ability to for planning, developing, and verifying project scope. It
quickly and accurately predict factors that may impact provides an industry approved "road map" that can as-
project risk becomes more critical. The PDRI can help sist a project team towards reaching or exceeding its
the project team identify and focus on the few major objectives. Specifically, the PDRI can help improve
elements (those with higher relative weights) that will completion of the five major subprocesses of scope man-
have the greatest ability to influence project success. agement: initiation, scope planning, scope definition.
58/ JOURNAL OF MANAGEMENT IN ENGINEERING / SEPTEMBER/OCTOBER 1997
I I I I
Initiation Scope Planning Scope Definition Scope Scope Change
Verification Control
scope verification and scope change control. The follow- regarding the need for additional information in the
ing discussion includes ideas for using the PORI to fa- scope package. This is important because often
cilitate successful completion of each of these subpro- owner companies are not aware of the level of def-
cesses: inition necessary for contractors to successfully
complete the project. Finally, it can be used as one
1. Initiation. The PORI can help define the overall indicator in making the decision of whether to au-
project requirements for developing and assem- thorize the project for detailed design and construc-
bling the project team. It can help all stakeholders tion.
involved in the project understand its scope defi- 5. Scope change control. When used effectively, the
nition requirements. The PORI also can be used in PORI forces good scope definition. Therefore,
developing a baseline for understanding the current when scope changes occur the affected areas can
level of project definition. This, in tum, can assist be identified more easily. The PORI allows the
in creating the project charter. project, team to refocus effort during project exe-
2. Scope planning. The PORI can help the project cution on any elements that were not well defined
team determine which elements are the most criti- early on, perhaps due to time or financial con-
cal in the project scope package. The hierarchy of straints, and take action to improve their definition.
PORI sections, categories, and elements can form It also provides a basis for "lessons learned" dur-
the basis of a work breakdown structure (WBS) for ing future endeavors.
proper scope planning. The PORI also can assist in
developing project milestones, standardizing ter- CONCLUSIONS
minology (either between owners and contractors The PORI is an easy-to-use tool that can greatly im-
or between multiple owners involved in joint-ven- prove scope management efforts on industrial construc-
ture operations) and in communication with con- tion projects. Poor scope definition has been shown to
sultants. The ultimate results of scope planning will be one of the leading causes of project failure in our
be a scope management plan and a scope state- industry. The PORI, when implemented effectively, can
ment. greatly improve the probability of project success by re-
3. Scope definition. The PORI provides a structured ducing the potential for failure due to poorly defined
approach to project scope definition. Detailed ele- scopes. Although it was developed for use on industrial
ment descriptions in a checklist format help ensure construction projects the writers feel that similar tools
that each appropriate element is adequately ad- can be created for other project management applica-
dressed. The PORI can be used to score the com- tions. For information on how to develop one for other
pleteness of the project scope package during the business needs, see the methodology outlined in Gibson
planning process in order to measure progress, as- and Dumont (l996a). The writers also recommend that
sess risk, and redirect future effort. It also can assist companies should consider incorporating the PORI as a
in assigning work responsibilities to the scope def- standard tool to assist in their scope development and
inition WBS. management processes.
4. Scope verification. PORI scores reflect the quality The PORI can benefit both owner and contractor com-
and completeness of the project scope package. panies. Owner companies can use it as an assessment
Analysis of these scores can facilitate risk assess- tool for establishing a comfort level at which they are
ment by highlighting the project's weak areas. It willing to authorize projects. Contractors can use it as a
can provide a benchmark for comparison against means of identifying poorly defined project scope defi-
the performance of past projects in order to predict nition elements. The PDRI provides a means for all
the probability of future success. Project evalua- project participants to communicate and reconcile dif-
tions can be conducted by both owners and con- ferences using an objective tool as a common basis for
tractors either separately or together to ensure a fair project scope evaluation. Any company wishing to im-
assessment and a "meeting of the minds" among prove performance on their industrial construction
all stakeholders. The detailed element descriptions projects will find the PDRI to be a simple, effective, and
in the tool provide an objective basis for discussion powerful tool.
JOURNAL OF MANAGEMENT IN ENGINEERING / SEPTEMBER/OCTOBER 1997/59