The lesson learned: Project scope drives project cost and schedule

Cameron, Scott

NASA Technical Reports Server

LESSONS LEARNED 
AGAIN AND AGAIN AND AGAIN 
RECENTLY I HAVE SAT THROUGH A VARIETY OF PROJECT CRITIQUES 
AND HAVE ASKED THE TEAMS INVOLVED TO ARTICULATE THE IR 
LESSONS LEARNED ON THEIR PROJECTS. DURING THESE REVIEWS, 
MY ANXIETY LEVEL AND BLOOD PRESSURE INVARIABLY INCREASE 
BECAUSE I HEAR THE SAME LESSONS LEARNED, REPEATED AGAIN 
AND AGAIN FROM EACH TEAM. 
[ WANT TO SCREAJvl, "I LEARi ED THESE LESSO IS 30 YEARS 
ago. Why do we continue to learn these same lessons 
over and over again?" I don't scream, though; [ remind 
myself the individua ls are probably experiencing these 
lessons for the fi rst time. ['ve come to realize, too, just 
about all the repeated lessons reduce down to just 
one primary lesson: Project scope drives project cost 
and schedule. 
Said another away, if you properly define and gain 
alignment to your project scope early in the life of your 
project, the cost and sched ule wi ll follow. 
I love the scope but hate the cost!!! 
[ was the project manager on a project and was called 
into a Friday afternoon meeting to review the project's 
cost, scope, and schedule. [ used my traditional agenda 
of scope review, cost review and schedule review. During 
the scope review, [ discussed the base scope (i .e. scope 
required to meet the business requirement) and the 
value-added scope (i .e. savings-justified scope, wh ich is 
discretionary but improves the economics of the overa ll 
project) . The scope review went extremely well. 
ext we talked the cost of this scope. The reaction 
was, " t love the scope but hate the cost." My response 
was if you like the scope, then this is the cost. We went 
back and forth on this point for the next twenty 
minutes and at the conclusion of a robust discussion , 
we agreed to the proposed scope but disagreed on the 
cost to be presented to top management the following 
Monday. We did agree to mull over the scope and cost 
data and reconvene on Monday morning to review our 
positions again. We met at 7 AM on Monday and 
agreed to use my cost figure in the subsequent 
meetings with hierarchy. The figure was used , the 
scope was installed, and the job came in slightly below 
the stated costs. 
This experience reaffirmed my belief that if yo u get 
the scope correct, the costs will be correct. As [ sit 
through other project critiques or learn a project's 
costs are trending high or low, the root cause [ ask the 
team to address is how their original scope basis has 
changed. Without exception, changes in scope by the 
team and/or their hierarchy directly relate to changes in 
cos t and schedule. 
by W. Scott Cameron 
NASA ACADEMY OF PROGRAM AND 
https://ntrs.nasa.gov/search.jsp?R=20120000511 2019-08-30T18:32:02+00:00Z
I want this cost but need that scope 
We started to design and construct a "grass-roots" 
manufac turing facili ty and planned to complete the 
multi-million do ll ar project seve ral yea rs later. 
Unfortunately, just how many millions of dollars the 
plant was going to cost became extremely troublesome. 
Ea rly in the life of thi s project, management believed 
the project should cost $X, a figure based on their co\\ec-
ti ve experience and not on the project's scope. Agreement 
to proceed with the project and its staffin g was based on 
their $X cost figure. A subsequent conceptual study, 
however, indica ted that the project's cost coul d be as high 
as $X + 40% based on the defined scope. 
Management declared this estimate unaccept-
abl e. T hey qu es ti oned th e cos t engin eer's credibility, 
even th o ugh he was quite experi enced and had used 
prove n methods to deve lop the es timate. Accusa ti o ns 
fl ew th at the scope and estimate we re "gold- plated. " 
After agreein g to reduce the project sco pe to appease 
manage ment (fo r exa mple, red ucing the building 
size), a com promi se estim ate of $X + 20 % was 
reached by agree ing to e li minate o r change spec ific 
scope items. 
After receiving project funding, however, the elimi-
nated/modi fied scope was res to red beca use th e 
reducti on decis ions had been based on cos t criteri a 
alone, with no real considerati on of the actua l needs 
of the project. For example, by rcducing the build ing 
WITHOUT EXCEPTION , CHANGES IN SCOPE BY 
THE TEAM AND/OR THEIR HIERARCHY DIRECTLY 
RELATE TO CHANGES IN COST AND SCHEDULE. 
size, a key piece of process machinery could no longer 
fit , so the building had to be returned to its o riginal 
dimensions. Despite valid scope additions, management 
refused to approve project change authorizations. T hey 
sa id , "You already have 20% more fund ing th an you 
need. We're not going to give you more fa t! " 
On ce management igno red va lid cost es tim ating 
and trending data, th e project tea m didn 't bother 
much with cos t contro l. The situ atio n soon got out 
o f hand. Th e projec t tea m knew th ey we re exceed ing 
th eir fundin g co mmitment, but s in ce manage ment 
refu sed to li s ten to th e tea m 's conce rn s and data, 
SINCE MANAGEMENT REFUSED TO LISTE N TO 
THE TEAM 'S CONCERNS AND DATA , COST 
CONTROL WAS INEFFEC TI VE. 
cos t co ntro l was in effec ti ve. 
So the required scope grew while the cost predic-
ti o ns stayed th e sa me. W hen the project tea m 
completed definiti on and des ign, a second estim ate was 
published at $X + 25% . During constructio n, the 
estimated cos t of the plant increased to $X + 40% (note 
the amount the conceptual study estimated at the 
outset of the project) . 
At project close, the project team had do ne an 
excellent job of designing and build ing the plant. T he 
start-up was on time and one of the best in company 
history. Cost was the only cri te rion the project fa iled to 
meet. Once again , the same lesson lea rned: Project 
scope dri ves project cost and schedul e. 
We conti nue to learn this lesson over and over 
again . O ne day I may just scream! • 
SCOTT CAMERON is the Global Cap ita l Systems Manager fo r the Food & Beverage Glo bal Business Unit of Procter 
and Gamble Co mpany in Cin cinn ati , O hi o. For the past 20 years, he has managed ca pital projects and 
developed o ther capital management practitioners fo r Procter & Gambl e with in its Bea uty Care, 
Health Care, Food & Beverage and Fabri c & Home Care Busin esses. 
I In an interview las t yea r (ASK 7), Cameron refl ected on his tenure as a project manager: 
"Wh en I think abo ut how I have grown throughout my career, I ca n talk about the projects that I've worked on. But 
wh en [ get down to th e roo t cause of my growth and development, the most im po rtant facto r has been th e people who 
managed, coached and challenged me. Individual managers have had a profound impact on me. As I loo k back, [ ca n 
see how this boss taught me how to write proposa ls. This mentor ta ught me financial aspects and cash flow of the 
company. This peer foc used me on schedul es. This one foc used me on tea m dynami cs. This one ra ught me how to 
listen and not immediately reac t. A collec tion of peo ple he lped me beco me the manager I a l11 today, and now [ fee l 
th at it's part of my jo b to share my experi ence with younger managers the sa me way that others in ves ted in me." 
ASK 1.2 FOR PRACTITIONERS BY PRACTITIONERS 23 
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Lessons Learned Again and Again and Again

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