Scope Definition Techniques in Capital Project Management

Project scope is a critical aspect of capital project planning that establishes all of a project's deliverables and tasks, deadlines, and costs. Project failures, often caused by cost and schedule overruns, are often caused by poor or delayed scope definitions. Developing a clear, well-defined, and realistic scope greatly contributes to project success.

Below, we detail the importance of defining the project scope as early and as robustly as possible as well as scope definition techniques and best practices to follow to minimize potential risks.

The Importance of Early and Strong Scope Definition in Capital Project Management

Developing an early and strong scope definition is critical for the success of capital projects of all types and sizes. Poor scope definition is often the result of pressure to quickly begin project execution, lack of in-house design or planning abilities, or financial pressure to minimize planning costs. However, having a poor or delayed scope definition can lead to significant changes to the scope and increased change orders, which can result in large cost and schedule overruns. Scope definition is arguably the most important process in the capital project life cycle.

Scope Definition Techniques for Capital Projects

The sequence for project scope definition and management typically follows the structure detailed below:

1. Collect project requirements.
2. Define the project scope.
3. Verify the project scope with the client.
4. Create a Work Breakdown Structure (WBS).
5. Create a Project Execution Plan (PEP).
6. Monitor and control the project scope.

Collect Project Requirements

Projects may be brought in with various levels of scope definition. While it is helpful for project owners to come to a contractor with higher degrees of scope definition, contractors should be ready to meet project owners where they’re at. Using a methodical and systematic approach can ensure that all requirements are captured. 

Early in this process, project owners should communicate the driving factors for their project to the contractor, whether this is cost or schedule, as this may change staffing, cost, and schedule requirements. During initial scoping meetings, contractors should ask project owners for pertinent documentation, such as a written scope of requirements including identified deliverables and equipment as well as red line marked-up documents, such as piping and instrumentation drawings and pictures from the field to determine component placement. If the level of scope definition is low and such documentation is not available from the project owners, contractors will develop this documentation.

All stakeholders should be involved early on to help ensure alignment from the beginning. After scoping meetings, contractors should delve deeper into how project requirements translate into actionable goals and expectations. 

Define the Project Scope

If project requirements are properly determined, contractors should be able to define the project scope, outlining what will be delivered, what will not be delivered, the estimated budget for the project, and the expected duration of the project. It is critical to identify where gaps are present in project requirements, where information is unclear, and to take action to ensure the scope is fully defined and evident to each party involved. The result should be a project scope document, or Statement of Work, that captures all features, functions, and requirements that project owners and stakeholders expect from the project, outlining the work that will be completed during project execution.

Verify the Project Scope with the Client

Many capital projects have strict deadlines that are often key criteria for project success. As such, verifying the project scope with all parties involved before and during the life cycle of a project is critical. This means each stakeholder and project owner should review the project scope in detail and formally agree upon the scope and project deliverables.

Create a Work Breakdown Structure (WBS)

Following scope definition, contractors should create a WBS which is the central organizational hierarchy that syncs a project schedule, cost, and performance against a budget for all levels of a WBS. An effective WBS should include deliverable-oriented groupings of project elements and cover all project components. It should contain the entirety of work dictated by the scope to cover all deliverables and work that must be completed throughout the project. 

Create a Project Execution Plan (PEP)

Contractors should create a PEP to highlight the critical path of a capital project and lay out plans for project execution. A PEP is a primary document that outlines and establishes a contractor’s plan to execute, monitor, and control a project. PEPs should include an overview of each of the components within a project’s scope of work. PEPs enable contractors to create comprehensive reports for measuring the progress of a project.

Monitor and Control the Project Scope

After the scope has been clearly defined and approved by everyone involved, and a WBS and a PEP have been created, the focus should be placed on managing and controlling the scope. This includes avoiding scope creep when possible and utilizing an established change management work process when changes do arise. Changes to project scope can bring risk, increase costs, and delay schedules. Thus, using proven methods to identify, communicate, and incorporate changes is crucial.

Ensuring Strong Scope Definition to Drive Capital Project Success

Proper scope definition is a key factor that influences project success and deserves special attention. At H+M Industrial EPC, we plan ahead to keep you ahead with our proven project planning services. We incorporate all of the above best practices and scope definition techniques to drive project success from the start.